UBS Group To Impose Tight Restrictions On Credit Suisse Bankers
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UBS Group is planning to impose strict restrictions on Credit Suisse bankers. These restrictions include a ban on new clients based in high-risk countries. UBS is also restricting the addition of complex financial products.
UBS imposes tight restrictions on Credit Suisse bankers
A report by the Financial Times has revealed that UBS Group, which is set to become the largest banking giant in Switzerland, is already making some changes at Credit Suisse. UBS has developed a list of nearly two dozen “redlines” that bat the staff at Credit Suisse from participating in a wide range of activities.
One of these restrictions is that Credit Suisse bankers will not sign new clients from high-risk countries such as Russia, Sudan, Venezuela, and Libya. These bankers have also been barred from launching new products without getting approval from UBS managers.
The report also noted that the ban on new clients includes Ukrainian politicians and state-owned companies to prevent money laundering. These changes could be the start of a flurry of changes that UBS will introduce to Credit Suisse after the takeover deal is completed to help the former Swiss lender to go back to profitability.
On Friday, the Swiss government agreed to a guarantee of up to 9 billion Swiss francs, equivalent to $9.96 billion worth of losses that UBS might incur from the sale of rival assets beyond the 5 billion francs that the lender is due to cover on its own. Credit Suisse and UBS have yet to issue a formal statement on these strict guidelines for bankers.
UBS closes Credit Suisse takeover to become a banking giant
On Monday, UBS revealed that it had closed the emergency takeover deal for its embattled rival Credit Suisse. The move has created a giant Swiss bank, whose balance sheet now stands at $1.6 trillion. UBS now has more dominance in the wealth management industry.
The takeover deal is the largest deal in the banking industry since the global financial crisis of 2008. The Chief Executive at UBS, Sergio Ermotti, and Chairman Colm Kelleher have said that the takeover deal will present challenges. However, they have also noted that the deal will create opportunities for clients, employees, shareholders, and Switzerland.
In an open letter that was sent to Swiss newspapers, the two said that the takeover was the beginning of a new chapter for UBS. The letter noted that UBS would now be ranked as the world’s largest wealth manager, and Switzerland was now the center of the global financial industry.
The letter added that the two did not have any doubts that they would handle the takeover. The deal will see UBS managing $5 trillion worth of assets, and it will now be a leader in crucial positions in the market.
On the other hand, this merger has halted the 167-year history of Credit Suisse. In recent years, Credit Suisse has faced many scandals and losses that triggered a massive wave of deposit outflows over the past year.
