DOHA, Could 23 (Reuters) – Customary Chartered CEO Invoice Winters on Tuesday mentioned the sale of Credit score Suisse (CSGN.S) to UBS (UBSG.S) was “shocking” given the “uncommon” phrases of the deal, which prioritised shareholders over bondholders.
“The conclusion was very shocking to me, when it comes to the way in which that the financial institution was resolved by way of this very uncommon sale to UBS, with related uncommon funds to shareholders versus bondholders,” Winters advised an viewers on the Qatar Financial Discussion board, organised by Bloomberg.
Below the rescue deal, engineered by Swiss authorities over one March weekend amid international banking turmoil, UBS agreed to purchase Credit score Suisse for 3 billion Swiss francs ($3.4 billion) in inventory and to imagine as much as 5 billion francs in losses that will stem from winding down a part of the enterprise.
About $18 billion in Credit score Suisse’s Extra Tier 1 (AT1) debt was rendered nugatory within the transaction, resulting in litigation from bondholders.
Winters mentioned the banking disaster was over however {that a} transformation of banks was nonetheless wanted.
Talking on the similar discussion board, Qatar Funding Authority CEO Mansoor Ebrahim al-Mahmoud mentioned he thought UBS had received a “whole lot” with the Credit score Suisse takeover.
Qatar’s sovereign wealth fund, Credit score Suisse’s second-largest investor, has explored looking for redress for losses incurred within the takeover, Reuters reported on Could 17, citing two folks acquainted with the matter.
The QIA sought authorized recommendation on whether or not it had any declare towards Swiss authorities, together with by way of worldwide arbitration, after the compelled sale at a fraction of Credit score Suisse’s market worth, the 2 sources mentioned.
UBS has flagged tens of billions of {dollars} of potential prices – and advantages – from its takeover of Credit score Suisse, underscoring the excessive stakes concerned because it prepares to finish the rescue of its struggling Swiss rival.
The primary rescue of a world financial institution because the 2008 monetary disaster, which is backed by as much as 250 billion Swiss francs in public funds, will create a wealth supervisor with greater than $5 trillion in invested property and over 120,000 staff globally.
Reporting by Andrew Mills; writing by Lisa Barrington; enhancing by Jason Neely
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