Credit Suisse sale to UBS was ‘surprising’ By Reuters

By Andrew Mills

DOHA (Reuters) – Standard Chartered chief executive Bill Winters said on Tuesday the sale of Credit Suisse to UBS was “surprising” given the “extraordinary” terms of the deal, which prioritized shareholders over bondholders.

Winters told an audience at the Qatar Economic Forum, which was organized by Bloomberg.

Under the bailout deal, engineered by Swiss authorities over a weekend in March amid global banking turmoil, UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.4 billion) in stock and assume up to 5 billion francs in losses that could result from collapse. down part of the work.

About $18 billion of additional Credit Suisse Tier 1 (AT1) debt was deemed worthless in the deal, prompting litigation by bondholders.

Winters said the banking crisis is over but banks still need to turn around.

Speaking at the same forum, Mansour Ibrahim Al-Mahmoud, CEO of the Qatar Investment Authority, said he believes UBS has secured a “good deal” with the Credit Suisse acquisition.

Reuters reported on May 17, citing two people familiar with the matter, that Qatar’s sovereign wealth fund, Credit Suisse’s second-largest investor, looked into seeking compensation for the losses it incurred in the acquisition.

The two sources said the QIA had sought legal advice on whether it had any claim against the Swiss authorities, including through international arbitration, after the compulsory sale at a fraction of the market value to Credit Suisse.

UBS has announced tens of billions of dollars in potential costs – and benefits – from its acquisition of Credit Suisse, highlighting the high stakes involved as it prepares to complete the bailout of its struggling Swiss rival.

The first bailout of a world bank since the 2008 financial crisis, backed by up to CHF 250 billion in public funds, would create a wealth manager with more than $5 trillion in invested assets and more than 120,000 employees globally.