Switzerland’s prosecutors are probing the government-orchestrated takeover of
by rival
Group AG.
The federal prosecutor has reached out to national and local authorities and “issued investigation orders” to analyze and identify if any criminal offenses took place under the deal, which also involved the government, the financial regulator, Finma, and Switzerland’s central bank, a spokeswoman said in a statement.
“In view of the relevance of the events, the office of the attorney general wants to proactively fulfill their mandate and their responsibility to contribute to a clean Swiss financial center,” the spokeswoman said.
Representatives for Credit Suisse, UBS and the Swiss finance ministry declined to comment.
Swiss regulators stepped in to arrange the merger two weekends ago after Credit Suisse customers, worried about its financial health, fled en masse. Government officials and regulators said the takeover was the only option. Letting Credit Suisse fail, they said, would cause a financial crisis in the country and likely globally.
UBS is paying more than $3 billion for Credit Suisse. To sweeten the deal, the Swiss government said it would provide more than $9 billion to backstop some losses that UBS might incur by taking over the bank. The
is also providing more than $200 billion of liquidity to UBS to help facilitate the deal.
The takeover has drawn criticism from several corners. Shareholders at Credit Suisse have complained they were stripped of their right to vote on the merger, while holders of $17 billion worth of Credit Suisse “additional tier 1” bonds that got wiped out under the deal say they were unfairly targeted.
AT1 bonds are securities that might become worthless when a bank runs into financial trouble. Shareholders are generally expected to take losses before these bondholders do.
The government is also facing questions over its decision to hastily pass new laws to facilitate the deal, including allowing it to happen without a shareholder vote.
Following the takeover, UBS will manage about $5 trillion in invested assets, more than U.S. rivals like
with big wealth-management arms. It will have to absorb Credit Suisse’s staff, likely cutting thousands of jobs in Switzerland and abroad, and will have to shrink the bank’s troubled investment-banking business.
The merger has also left Switzerland, a country with a long tradition of serving the wealthy around the world, with one big bank that analysts said will be even harder to deal with if it runs into problems in the future.
Write to Patricia Kowsmann at patricia.kowsmann@wsj.com
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Appeared in the April 3, 2023, print edition as ‘Swiss Prosecutors Investigate UBS’s Takeover of Credit Suisse.’
