Last month, Swiss authorities announced the purchase of Credit Suisse by UBS in a forced merger to stem further turmoil in the sector after the Swiss bank teetered on the brink of collapse.
UBS executives tried on Wednesday to convince investors that Switzerland‘s biggest bank can make the forced takeover of rival Credit Suisse work and compensate its shareholders.
Describing the biggest bank bailout since the 2008 global financial crisis as a milestone for the industry and a major challenge for the bank, Chairman Colm Kelleher told UBS shareholders that it also means “a fresh start and great opportunities ahead for the combined bank and the Swiss financial center as a whole”.
Last month, Swiss authorities announced the purchase of Credit Suisse by UBS in a forced merger to stem further turmoil in the sector after the Swiss bank reached the brink of collapse.
After a run on the bank’s deposits, the Swiss government turned to UBS, which bought Credit Suisse for 3 billion Swiss francs ($3.3 billion), while the country offered more than 200 billion francs in support and guarantees. .
Kelleher told the bank’s shareholder meeting in Basel that UBS is confident in its ability to successfully manage the Credit Suisse integration and that the combined bank will remain well capitalized.
“We believe the transaction is financially attractive for UBS shareholders,” he said.
The hastily arranged bailout not only angered and upset shareholders in both banks, but many in Switzerland as well.
A gfs.bern poll found that a majority of Swiss people do not support the deal that will create a financial institution with assets twice the size of the country’s annual economic output.
As shareholders expressed their frustration at being kept in the dark, with one calling it “an insult”, some also expressed concerns about possible job losses and the new giant bank’s adverse impact on competition.
Vice President Lukas Gaehwiler sought to allay such fears by saying that there were around 250 banks in the country and therefore sufficient competition. He also said it’s too early to speculate on jobs before the merger completes, which he expects to happen within a few months.
