Wednesday, June 7, 2023

Brussels approves without exception the help of Credit Suisse by UBS Financial markets

Credit Suisse office in Switzerland.

The European Commission approved this Thursday without any specific conditions the absorption of Credit Suisse by UBS on the understanding that the business does not raise competition issues on a Community scale, the institution reported in a statement.

The Community Executive explained that its research shows that the absorption “does not significantly reduce competition” in the markets in which the activities (of the two banks) are concentrated within the European Economic Area (EEA).

In particular, Brussels considered that the entity resulting from the merger “will continue to face significant competitive pressure from a wide range of competitors” in the markets in which it participates, including “several global banks, specialized providers and strong local players.” .

For example, the US bank Citi estimated in April that the merger of the two businesses would generate a fifth loss of business in terms of the cost of assets under wealth management in the Management division, which oversees the large net of individuals.

“The Commission therefore concludes that the proposed merger does not raise a dispute in any of the examined markets within the EEA and has approved the transaction unconditionally,” the community authorities emphasize.

Swiss bank UBS agreed to buy rival Credit Suisse in mid-March, just days after the turmoil with regional banks in the United States, caught up in a crisis of confidence, has plunged its share price.

UBS, which paid 3,000 million francs (3,050 million cash) to Suisse Credit to save it from bankruptcy, is confident that it will be able to close the operation at the end of May or June.

Lots of information

rising earnings

With the approval obtained this Thursday, UBS expects to obtain a profit of 34,777 million euros (31,975 million euros) due to the negative equity assessed against the goodwill of Credit Suisse, which reflects the fair value of the assets and liabilities in consideration of the acquisition. of the transaction.

According to documents on this matter registered by UBS before the Securities Market Commission of the United States (SEC), the estimated price is about 3,461 million tons (3,182 million in cash), while the value of the assets would add up to 38,238 million. hundred (35,157 million in cash).

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Nation World News Desk
Nation World News Desk
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