Beautiful Virgin Islands

Monday, Oct 06, 2025

The One Big Winner And Many Losers Of UBS's Credit Suisse Crisis

The One Big Winner And Many Losers Of UBS's Credit Suisse Crisis

The UBS Group agreed to buy its smaller rival for about $3.3 billion in a share deal that includes extensive guarantees and liquidity provisions.

UBS Group AG is emerging as a rare winner in Credit Suisse Group AG's crisis after a historic, government-brokered deal that contains a raft of financial shock absorbers.

After a weekend of frantic talks to forge a solution before markets opened in Asia, the firm agreed to buy its smaller rival for about $3.3 billion in a share deal that includes extensive guarantees and liquidity provisions. Here are some of the big winners and losers to emerge from the deal.

The Winner: Ralph Hamers

UBS's chief executive officer will see the bank's wealth and asset management invested assets soar to about $5 trillion and got a special waiver to keep Credit Suisse's profitable Swiss unit that many analysts said was worth more than triple what UBS paid for the whole firm.

Ralph Hamers, the former ING Groep NV executive, and his team will have plenty to work through as they consider which businesses and people to keep, alter or jettison. But he'll have 56 billion francs of so-called badwill to help cover any writedowns, as well as 9 billion francs of guarantees from the Swiss government to take on certain losses. And the firm can access a huge liquidity line from the central bank.

While UBS will suspend its share buybacks for now, it said it's still committed to a progressive dividend.

The (Many) Losers:

Credit Suisse's Top Shareholders

Gulf investors old and new are hurting. Saudi National Bank's investment was stunning in its brevity: the lender lost 1.1 billion francs less than 15 weeks from when it finished buying its stake in Credit Suisse's latest capital raise. The firm thought it was buying at a bargain when it became the Swiss bank's largest shareholder just a few months ago. Saudi National Bank's chairman helped fuel the panic this week when he ruled out raising its stake in Credit Suisse.

The Qatar Investment Authority's pain came over a much longer period, as it first invested in the last financial crisis, but it likely lost an even greater amount. In addition to being the bank's second-biggest holder, it had owned in the past the firm's AT1 bonds that were written to zero in the deal, though it's unclear if QIA still held that debt. Shareholders won't even get to vote on this deal after Switzerland changed its rules to rush the merger through.

Ulrich Koerner

Credit Suisse's chief executive officer is expected to depart, having inherited a broken lender that he was unable to revive. Ulrich Koerner, who only took the top job last summer, had already mapped out a plan to cut back risk after a torrent of scandals and losses to focus more on wealth management. Bolder still was a plan to break out the bank's best-performing investment banking businesses. But the firm was unable to recover from a crisis of confidence that caused billions of dollars to exit in October. In recent days, the pressure intensified until the Swiss government was forced to step in.

Michael Klein

The former Citigroup Inc. investment bank head's grand plan to revive the First Boston brand and build it into a Wall Street advisory powerhouse now looks in ashes. Michael Klein, who had been tapped to lead the CSFB spinoff, was already in the process of selling his advisory boutique to Credit Suisse for a consideration of about $210 million when the bank's fortunes suddenly unraveled in recent weeks. While UBS Chairman Colm Kelleher didn't directly address CSFB at a press conference late Sunday, he did indicate that the firm was happy with its own investment bank and planned to cut back Credit Suisse's substantially as well as pare back risk.

AT1 Bondholders

Bond investors are typically better protected from losses than shareholders, but not in this case. The Swiss regulator will impose losses on $17 billion of high-risk debt known as Additional Tier 1 bonds that make up part of a buffer of debt and equity intended to prevent taxpayers from having to shoulder the bill for a bank's collapse. The total writedown marked the biggest loss yet for Europe's $275 billion AT1 market. Shareholders, who typically are first to take a hit in a writedown scenario, got at least a small consideration.

Swiss authorities, taxpayers

Finma became the first regulator to watch a bank deemed systemically important have to be rescued since the financial crisis. The Swiss government had to step in an provide billions of francs in guarantees to UBS and the central bank was forced to provide extensive liquidity backstops to facilitate the rescue, putting taxpayers at risk 15 years after they bailed out UBS. Swiss Finance Minister Karin Keller-Sutter acknowledged it was the only way to stabilize international financial markets. Lots of Swiss money is being put up to help absorb any shocks from the deal, from a 9 billion franc guarantee on possible losses to huge credit lines from the Swiss central bank.


...and the Late Exit


Harris Associates

For years, Harris Associates and stock picker David Herro were closely linked to the fate of Credit Suisse as its biggest shareholder. He'd been a vocal supporter of former CEO Tidjane Thiam during his tussles with the board after a spying scandal and stuck with the bank through years of scandals and losses. But, amid the latest restructuring plan in October and huge outflows, he finally threw in the towel. He said earlier in March that he'd exited the stake in recent months. While it's not clear at what price he sold at, he did manage to avoid the precipitous declines in the stock during recent weeks as the bank was pummeled by a crisis of confidence.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
×