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The recent emergency takeover of Credit Suisse by UBS has not only created a Swiss banking and wealth management behemoth but has also sparked a debate about the size of the new entity and its implications for Switzerland's economy. Despite concerns, UBS-Credit Suisse Mega Merger Ignites Debate on Swiss Economy: CEO Ermotti Defends Size

The recent emergency takeover of Credit Suisse by UBS has not only created a Swiss banking and wealth management behemoth but has also sparked a debate about the size of the new entity and its implications for Switzerland's economy. Despite concerns, UBS-Credit Suisse Mega Merger Ignites Debate on Swiss Economy: CEO Ermotti Defends Size

📃 The UBS-Credit Suisse Merger: Helvetia’s Gift The recent emergency merger between UBS and Credit Suisse orchestrated by the Swiss regulator Eidgenössische Finanzmarktaufsicht FINMA, Schweizerische Nationalbank 🏛 and the Swiss Federal Council, aimed to stabilize the shaken faith in the Swiss banking system. But questions arise: Did it come at a cost to taxpayers, and who truly benefited from the deal? It is time to dive deeper into the impact of this merger deal: In a new working paper 👏 (https://lnkd.in/eZaQhdP7) with Prof. Dr. Tim A. Kroencke (Université de Neuchâtel) and Prof. Dr. Florin Vasvari (London Business School), I (Prof. Dr. Pascal Böni) analyze this historic bailout-merger, which marked the end of 167 years of CS’s proud Swiss banking history. Our findings reveal some intriguing insights. The combined stakeholder net wealth increased by a staggering $22.8 billion. UBS stockholders and CS straight bondholders saw their wealth appreciate by approximately $5.1 billion and $18.8 billion, 💰 respectively. However, CS stockholders paid a portion of the bill, experiencing a negative wealth effect of -$1.1 billion. AT1 CS bondholders shouldered a significant burden, with their bonds wiped out, accounting for $3.9 billion. But where did the rest of the wealth increase come from? We believe it stems from bidder restrictions imposed by the Swiss National Bank and FINMA, a co-insurance effect, and the notorious "too-big-to-fail" effect. A detailed discussion is provided in the paper. Our study raises important questions about the efficiency of current banking regulations and the social costs of bank failures. Read the NZZ-article: https://lnkd.in/eXmmZp_Q Read the Financial Times-article: https://on.ft.com/3DPMKYj Learn more about this study here: https://lnkd.in/e6T-xqfM Universität Basel Faculty of Business and Economics, University of Basel TIAS School for Business and Society #UBSCreditSuisseMerger #mergers #innovation #management #economics #economy #BankingIndustry #FinancialRegulation #TooBigToFail #InvestmentResearch #BankingUnion #SwissBanking #CreditSuisse #UBS #FinanceInsights #mba #finance #education    

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According to Bloomberg, UBS Group AG shares have been on a tear since the Swiss bank’s rescue of domestic rival Credit Suisse, rising more than a third and adding $27 billion in value. The stock extended its gains on Thursday, climbing as much as 7.2% after the lender posted a record quarterly profit on the back of the bargain acquisition that was announced in March. With a market value equivalent to $92 billion, UBS has nailed down its position as the second-largest lender in Europe. At that level it is more than a tenth bigger than BNP Paribas SA, only a month after overtaking its French peer. Still, the Swiss lender has a long way to go to become Europe’s biggest bank. That title is held by HSBC Holdings Plc with a market capitalization of about $147 billion. https://lnkd.in/dYDhdqEY

EFG International Shares Surge Amid Takeover Speculation by Julius Baer Shares in Swiss bank EFG International saw a significant increase of up to 10% on Thursday, following a media report suggesting the possibility of a takeover bid by Swiss competitor Julius Baer. The financial news website Inside Paradeplatz indicated that there was speculation about Julius Baer preparing an offer for EFG, valued at 4.5 billion Swiss francs ($5.05 billion) in a combination of shares and cash. However, the report labeled this information as speculative. In late May, Reuters reported that Julius Baer and EFG had engaged in discussions about a potential acquisition, though these talks had ceased. When approached, representatives for both Julius Baer and EFG declined to comment on the matter. Following the news, EFG's stock experienced an initial rise of 10.3% before settling at a 7.8% increase by 1028 GMT. Conversely, Julius Baer's shares dropped by more than 5%.

Next PLC (LSE:NXT) has had its price target upgraded by #DeutscheBank following a stellar Christmas #trading period as revealed on Thursday. Analysts at the German bank have kept the stock on its ‘hold’ rating but upgraded its share price target from 7,700p to 8,000p – just under a 5% decrease from the current 8,360p price. “Next has delivered its 5th profit upgrade for FY24e and topped this with an initial view of FY25e PBT that is c.1% ahead of consensus,” Deutsche Bank said. However, it remained cautious over the fact a large part of the pre-tax profit growth is coming from “acquisitions and definitional changes”, which the bank says makes it harder to analyse or warrant a multiple expansion. Looking at the short term, Deutsche Bank says #Next is being rewarded by investors for its consistency of earnings in the face of a sector which is seeing numerous material downgrades. More at #Proactive #ProactiveInvestors #LSE #NXT http://ow.ly/lExo1057VxS

The $29 billion profit made by #UBS in the second quarter was mostly the result of the recognition of #negativegoodwill resulting from the purchase of #CreditSuisse. Negative goodwill is a rare occurrence in mergers and acquisitions, but it can happen when the acquirer pays a price that is significantly below the fair value of the target company's assets. In this case, UBS was able to acquire Credit Suisse for a fraction of its book value, which resulted in a significant gain on the acquisition. The Swiss government intervened to make the purchase go through because it was worried about the stability of the Swiss banking system. Credit Suisse had been struggling financially for several years, and the government feared that if it were to fail, it could have a ripple effect throughout the Swiss economy. UBS has said that it intends to use the negative goodwill to raise its capital ratios and finance future expansion. The bank has also stated that over the following few years, it intends to incorporate Credit Suisse's operations into its own. UBS has said that it is committed to making the integration a success, and it has appointed a team of experienced executives to lead the effort. However, it remains to be seen whether the bank will be able to overcome the challenges and realize the full value of the negative goodwill.

French banks’ exit from Africa, which is nearing its end, gives emerging pan-African banking groups significant space to grow, either organically or through mergers and acquisitions. This should stimulate competition and benefit local banking sectors despite some short-term challenges. Societe Generale announced the sale of Societe Generale Marocaine de Banques and its subsidiaries to the Moroccan conglomerate Saham Group on 12 April. This follows several African disposals by French banks in recent years. In the past six months SocGen has also agreed the sale of some other smaller African subsidiaries, and launched a strategic review to dispose of its 52.34% stake in Tunisia-based Union Internationale de Banques. BNP Paribas, BPCE and Credit Agricole’s African presence has also decreased over the last 10 years and is now very limited. We expect further divestments in the next 12-24 months, especially if valuations are attractive to the selling banks. Analysis by Jamal El Mellali, Ramy Habibi Alaoui, Nicolas Charreyron and Rafael Quina, CFA LEARN MORE: https://lnkd.in/eCkp-bQd

Merger between UBS and Credit Suisse:   On Thursday, the merger between UBS and Credit Suisse was officially ratified, with the Boards of Directors of both banks giving their final approval to the proposed combination of UBS AG and Credit Suisse AG.   Credit Suisse had not withstood the loss of confidence that had set in following several major scandals and poor risk management, including accusations of money laundering, a sulphurous clientele and questionable governance practices. In order to avoid the collapse of Switzerland's second-largest bank, the Swiss authorities forced UBS to buy Crédit Suisse, as a failure of the latter could have significant repercussions for the economy.   However, as announced by Crédit Suisse regarding its integration into UBS:   "The combined strength of a united bank allows us to expand our services for the benefit of clients, develop innovation and offer access to global expertise, building on our position as Switzerland's leading universal bank, an outstanding position in global wealth and asset management, and our status as a capital-efficient investment bank."   Adding to the testimony of this promising merger, Credit Suisse expresses its abundant and captivating promise:   "We focus on our customers - individuals, entrepreneurs, businesses and institutional clients - and help them achieve their goals. We show respect for Switzerland and its people. That is why we remain committed to our strong UBS culture, our risk culture, and our high quality of service. We are aware of our responsibility and welcome you into our fold as a reliable partner of the Swiss financial and business center. For example, we intend to take over the credit lines of companies that are customers of both banks.     In conclusion, the formalization of the merger between UBS and Credit Suisse on Thursday marks a historic step, symbolizing the first alliance between two banks of global systemic importance. Credit Suisse's statement underlining the synergistic benefits of this union reinforces the commitment to clients and the Swiss economy, promising a united, powerful, and innovative bank for the future.   By: Yohan Eliazord   Federal Department of Finance: Acquisition of Credit Suisse by UBS: chronology of events: https://lnkd.in/dGPH-q6f   Credit Suisse, Information on the integration into UBS: https://lnkd.in/dYxHZDts #mergers #creditsuisse #UBS #Switzerland