UBS’s takeover of Credit Suisse was a “milestone” in global finance but entails a “huge amount of risk,” according to the bank’s chair Colm Kelleher.
“It was a historic day and a day we hoped would not happen. Yet it is a significant milestone, not only for UBS and Credit Suisse but also for Switzerland, for the global financial industry,” he said.
Speaking at today’s AGM in Basel Kelleher said the deal would accelerate the bank’s existing strategy, with growth focused in the US and Asia, but cautioned that “this is not in any way an easy deal to do”.
“You cannot just put numbers together and reach a sum, you have to understand there is a huge amount of risk in integrating these businesses,” he commented.
The Swiss government and financial regulators triggered the enforced marriage in a US$3.25bn emergency deal in a bid to calm financial markets after the collapse in the share price of Credit Suisse.
“We made a choice on behalf of Switzerland, UBS’s place in Switzerland, and on what was best for the global financial system,” said Kelleher.
Vice Chair Lukas Gähwiler explained, “We had only 48 hours to conduct our due diligence, so many questions thus remain unanswered,” adding “I can understand why people are bewildered, even angry.”
The takeover will make UBS the fourth-largest lender worldwide, with US$5tn in assets under management but it will be a long time in the making.
Some investors remain to be convinced. “We are concerned about this new giant bank,” said Vincent Kaufmann, chief executive of the Ethos foundation, which represents more than 3% of UBS’s shares.
UBS shareholders met just a day after Credit Suisse’s AGM in Zurich which will be the in the bank’s 167-year history.
Chair Axel Lehmann said he was “truly sorry” that events had brought the bank to the end of its independent existence.
Investors queued up to lambast the failed bank’s management with one suggesting the Credit Suisse board would have been crucified in medieval times.
Shares in UBS rose 0.1% to CHF18.78 in Zurich on Wednesday.