UBS completes Credit Suisse takeover to become wealth management behemoth

UBS on Monday said it had completed its emergency takeover of embattled local rival Credit Suisse, creating a giant Swiss bank with a balance sheet of $1.6 trillion and greater muscle in wealth management, Report informs via Reuters.

Announcing the biggest banking deal since the 2008 global financial crisis UBS Chief Executive Sergio Ermotti and Chairman Colm Kelleher said it would create challenges but also "many opportunities" for clients, employees, shareholders, and Switzerland.

"This is the start of a new chapter - for UBS, which calls itself the world's largest wealth managers, Switzerland as a financial centre and the global financial industry," they said in an open letter published in Swiss newspapers.

They have no doubts that they will successfully handle the takeover, the letter added.

The group will oversee $5 trillion of assets giving UBS a leading position in key markets it would otherwise have needed years to grow in size and reach. The merger also brings to an end Credit Suisse's 167-year history, marred in recent years by scandals and losses.

Credit Suisse shares were up 0.9% on their last day of trading, while UBS were up around 0.8% in early trade.

The two banks jointly employ 120,000 worldwide, although UBS has already said it will be cutting jobs to reduce costs and take advantage of synergies.

UBS agreed on March 19 to buy the lender for a knockdown price of 3 billion Swiss francs ($3.32 billion) and up to five billion francs in assumed losses in a rescue Swiss authorities orchestrated to prevent a collapse in customer confidence from pushing Switzerland's no. 2 bank over the edge.

On Friday, UBS struck an agreement with the Swiss government on the conditions of a 9 billion Swiss franc ($10 billion) public backstop for losses from winding down parts of Credit Suisse's business.

UBS sealed the deal in less than three months - a tight timetable given its scale and complexity - to provide greater certainty for Credit Suisse clients and employees, and stave off departures.

Both UBS and the Swiss government have offered assurances that the takeover will pay off for shareholders and will not become a burden for the taxpayer. They say the rescue was also necessary to protect Switzerland's standing as a financial centre, which would suffer if Credit Suisse's collapse triggered a wider banking crisis.