UBS has completed the acquisition of Credit Suisse, passing a major milestone. According to a statement released today, the combined entity will operate as a consolidated banking group and will create the 11th largest asset manager in the world and the third largest in Europe.
“We are excited about bringing together our highly complementary businesses and product offerings to scale our capabilities and enhance our client offering. With a combined USD 1.6 trillion in invested assets, we are creating the third largest Europe-based asset manager and the number 11 firm globally,” UBS Asset Management said in a press release.
In the asset management business, the acquisition also creates the number one Europe-based Index player with leading capabilities in customized and sustainability-focused solutions; an expanded Alternatives offering, across real estate, hedge funds and commodities, as well as the leading collateralized loan obligation (CLO) franchise globally; leading active investment capabilities, including a strong thematic equities offering; a continued commitment to sustainability and innovation, with an expanded offering; our increased asset base will provide a more influential ‘seat at the table’ for our stewardship and engagement activities; reinforce our strengths as the asset management leader in Switzerland; and an increased presence in the US and APAC, with an expanded footprint in China including Credit Suisse’s joint venture with ICBC, the firm said.
UBS Asset Management leadership team
UBS will build on UBS Asset Management’s existing target operating model, growth strategy and organizational set-up. Through the course of the next 90 days, they will work swiftly to determine the best options to create most value in the interest of our clients, employees and shareholders, the statement added.
The entity has now shaped the organizational structure of its business and announced the management team appointed for the Asset Management business, which will report to Suni Harford. Michael J. Rongetti will be CEO at Credit Suisse Asset Management; Barry Gill, Investment Director; Joe Azelby, Real Estate & Private Markets (REPM) Director; Aleksandar Ivanovic, Head of Client Coverage and EMEA & Suiza Head; Michael Kehl, Product Director; Nasreen Kasenally, Operations Director; James Poucher, América Regional Director and Raymond Yin, APAC & China Onshore Regional Director.
In the beginning, the UBS and Credit Suisse businesses will be required to run as separate affiliates. For its Asset Management clients, however, “we understand the importance of moving swiftly to provide clarity on how your assets are managed while we work to bring together our teams, capabilities and product offering,” the firm said.
As previously announced, UBS will operate the following governance model pending further integration: UBS Group AG will manage two separate parent banks – UBS AG and Credit Suisse AG. Each institution will continue to have its own subsidiaries and branches, serve its clients and deal with counterparties. The Board of Directors and Group Executive Board of UBS Group AG will hold overall responsibility for the consolidated group.
As it completes the acquisition, UBS announces Board of Director nominations for certain Credit Suisse entities. Subject to regulatory approval, the Credit Suisse AG Board will consist of Lukas Gähwiler (Chair), Jeremy Anderson (Vice-Chair), Christian Gellerstad (Vice-Chair), Michelle Bereaux, Mirko Bianchi (until 30 June 2023), Clare Brady, Mark Hughes, Amanda Norton and Stefan Seiler.
Colm Kelleher, UBS Group AG Chairman, said: “I‘m pleased that we’ve successfully closed this crucial transaction in less than three months, bringing together two global systemically important banks for the first time. We are now one Swiss global firm and, together, we are stronger. As we start to operate the consolidated banking group, we’ll continue to be guided by the best interests of all our stakeholders, including investors. Our top priority remains the same: to serve our clients with excellence.”
Sergio P. Ermotti, CEO of UBS Group AG, added: “Today we welcome our new colleagues from Credit Suisse to UBS. Instead of competing, we’ll now unite as we embark on the next chapter of our joint journey. Together, we’ll present our clients an enhanced global offering, broader geographic reach and access to even greater expertise. We’ll create a bank that our clients, employees, investors and Switzerland can be proud of.”
UBS expects its CET1 capital ratio to be around 14% in the second quarter of 2023 and to remain around that level throughout 2023. It anticipates that Credit Suisse’s operating losses and significant restructuring charges will be offset by reductions in RWA.
In the future, UBS will report consolidated financial results for the combined group under IFRS in USD. The second-quarter 2023 earnings will be communicated on 31 August 2023.