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☆ Credit Suisse’s Risky-Bond Wipeout Hurts Asia’s Rich
▼ + stars: | 2023-04-11 | by ( Rebecca Feng | ) www.wsj.com time to read: 1 min

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☆ Credit Suisse’s Risky Bond Wipeout Hurts Asia’s Rich
▼ + stars: | 2023-04-11 | by ( Rebecca Feng | ) www.wsj.com time to read: 1 min

☆ Swiss mega-bank has scope to shrink to greatness
▼ + stars: | 2023-04-05 | by ( Liam Proud | ) www.reuters.com time to read: +3 min

In UBS (UBSG.S), which is rescuing Credit Suisse (CSGN.S) in a government-brokered deal, they almost have one. The combined Swiss mega-bank will start out with a $1.7 trillion balance sheet, making it the 10th largest Western bank, based on Refinitiv data. Credit Suisse was in the process of running down, selling or carving out trading and investment-banking businesses with risk-weighted assets (RWAs) of $68 billion. Credit Suisse CEO Ulrich Körner was hamstrung by large losses, which drained capital and limited how quickly he could shrink. The emergency combination of UBS and Credit Suisse has created a banking giant.

☆ Credit Suisse wins $41 mln London lawsuit against Saudi Prince
▼ + stars: | 2023-04-05 | by ( Sam Tobin | ) www.reuters.com time to read: +2 min

Prince Fahad bin Sultan bin Abdulaziz al Saud is liable to pay his company Burgundy Sea Ltd’s debts to Credit Suisse, Judge Robert Bright said in a written ruling. Credit Suisse and the Saudi government’s communication office did not immediately respond to a request for comment. Prince Fahad and Burgundy, a special purpose vehicle ultimately owned by the prince, were sued by Credit Suisse in 2021 over a 48 million-euro ($52.5 million) loan for the refinancing of luxury motor yacht, the Sarafsa. In September 2021, Credit Suisse demanded Burgundy pay all its total debts for alleged breaches of the loan agreement and then called on Prince Fahad to settle the debts, under a personal guarantee of Burgundy’s obligations. However, the judge said that Prince Fahad and Burgundy “have no real prospect of successfully defending (Credit Suisse’s) claims”.

☆ UBS Credit Suisse rescue is messy but unstoppable
▼ + stars: | 2023-04-03 | by ( ) www.reuters.com time to read: +2 min

LONDON, April 3 (Reuters Breakingviews) - Very few people seem to want UBS (UBSG.S) and Credit Suisse (CSGN.S) to merge, but it’s unlikely that anyone will stop it. Switzerland’s Federal Prosecutor has opened an investigation into the state-arranged deal, the office of the attorney general said on Sunday. Credit Suisse’s share price is just 3% below the level where it should be based on the deal terms. A Credit Suisse 2033 bond , which could be converted to equity and potentially wiped out in a resolution, trades with a 6.4% yield, compared with 13% before the rescue. The lower return implies a high likelihood that it will be absorbed by UBS through the merger.

Credit Suisse Group AG’s new-look investment bank, CS First Boston, was supposed to help salvage the lender. Instead, it may have hastened its fall. The Swiss bank, buffeted by years of missteps and scandals, had a choice last year: Raise even billions more in new stock to shut down its scandal-prone investment bank or pull out the best parts and try to make money. It went for the second option, and miscalculated investors’ willingness to give it one more shot.

☆ How post-2008 bank rules led to a 2023 problem
▼ + stars: | 2023-03-30 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

Here’s how that story applies to the collapse of Credit Suisse (CSGN.S) and Silicon Valley Bank. Silicon Valley Bank’s technology-heavy customers attempted to withdraw $42 billion in a day. Reuters Graphics Reuters GraphicsFollow @liamwardproud on TwitterCONTEXT NEWSUBS will rescue Credit Suisse in a deal worth about 3 billion Swiss francs ($3.3 billion), Swiss authorities and the two banks said on March 19. The smaller bank lost 138 billion Swiss francs of customer deposits between Sept. 30 and Dec. 31, a 37% decline. The lender had $173 billion of total deposits on Dec. 31, of which $81 billion were non-interest-bearing demand deposits.

☆ Bank rescue real estate turns from dowry to downer
▼ + stars: | 2023-03-30 | by ( Aimee Donnellan | ) www.reuters.com time to read: +3 min

Unlike many banks which got into trouble back in 2008, the Swiss lender has flogged much of its prime real estate. In the last financial crisis prime real estate played a big part of bank rescues. When Barclays (BARC.L) bought Lehman Brothers’ U.S. capital markets business in September 2008 the deal included the bankrupt investment bank’s headquarters. Today there is less real estate underpinning bank values. For buyers preparing to rescue embattled banks, real estate has turned from a dowry to a downer.

☆ Credit Suisse has violated U.S. tax evasion deal, Senate Committee finds
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +3 min

LONDON, March 29 (Reuters) - Credit Suisse (CSGN.S) violated a 2014 plea deal with U.S. authorities by continuing to help ultra-wealthy Americans evade taxes and concealing more than $700 million from the government, the U.S. Senate Finance Committee found on Wednesday. After concluding a two-year investigation into Credit Suisse - which this month agreed to a rescue takeover by rival UBS (UBSG.S) - the committee said it had uncovered "major violations" of the 2014 agreement between the Swiss lender and the U.S. Department of Justice for enabling tax evasion. In an emailed statement, Credit Suisse said it did not tolerate tax evasion and had been cooperating with U.S. authorities. Credit Suisse in 2014 became the largest bank in 20 years to plead guilty to a U.S. criminal charge, agreeing to pay a $2.5 billion fine to authorities for helping Americans evade taxes in a conspiracy that spanned decades. Swiss authorities engineered the rescue of Credit Suisse earlier this month as they scrambled to prevent the lender from collapsing.

☆ Credit Suisse still helping wealthy dodge U.S. taxes, U.S. Senate Committee finds
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: 1 min

March 29 (Reuters) - Credit Suisse (CSGN.S) is still helping ultra-wealthy Americans evade taxes, the U.S. Senate Finance Committee said on Wednesday following an investigation into the Swiss bank. In an emailed statement, Credit Suisse said it did not tolerate tax evasion and that it had been cooperating with U.S. authorities. "Credit Suisse’s new leadership team has cooperated with the Committee’s inquiry and has supported the work of Senator Wyden, including in respect of suggested policy solutions to help strengthen the financial industry’s ability to detect undisclosed U.S. persons," the bank said. Reporting by Mrinmay Dey in Bengaluru and Tommy Reggiori Wilkes in London, Editing by Louise HeavensOur Standards: The Thomson Reuters Trust Principles.

☆ Credit Suisse is still helping ultra-wealthy Americans evade taxes, Senate panel says
▼ + stars: | 2023-03-29 | by ( Matt Egan | ) edition.cnn.com time to read: +3 min

The Senate investigation also found that former senior bankers at Credit Suisse were involved in the management of these large and undeclared offshore accounts. In a statement to CNN on Wednesday, a Credit Suisse spokesperson said the bank does not tolerate tax evasion. Credit Suisse said its new leadership has cooperated with the Senate inquiry. In 2014, Credit Suisse pled guilty to federal charges that it illegally allowed some US clients evade their taxes for decades. The latest allegations come just days after Credit Suisse reached an emergency deal to be acquired by rival UBS.

☆ Saudi Chairman of Credit Suisse’s Largest Investor Resigns
▼ + stars: | 2023-03-27 | by ( Summer Said | Dave Sebastian | ) www.wsj.com time to read: 1 min

DUBAI—The chairman of Credit Suisse Group AG’s largest shareholder has resigned less than two weeks after his comments set off a panic with the European lender’s shareholders that eventually led the Swiss government to engineer a takeover by rival UBS Group AG. Ammar al-Khudairy, the chairman of Saudi National Bank, is leaving for personal reasons and will be succeeded by Chief Executive Saeed Mohammed al-Ghamdi , the bank said on Monday. It didn’t say whether the resignation was tied to Mr. Khudairy’s comments on SNB’s investment in Credit Suisse.

☆ Saudi National Bank chair resigns after Credit Suisse comments
▼ + stars: | 2023-03-27 | by ( Hanna Ziady | ) edition.cnn.com time to read: +2 min

Ammar Al Khudairy had resigned “due to personal reasons” and would be replaced by CEO Saeed Mohammad Al Ghamdi, Saudi National Bank said in a statement Monday. During an interview with Bloomberg TV on March 15, Al Khudairy ruled out increasing the bank’s stake in Credit Suisse. That was in response to a question on whether Saudi National Bank was open to further equity injections into Credit Suisse if there was a call for additional funds. Saudi National Bank, which is 37%-owned by Saudi Arabia’s sovereign wealth fund, acquired a 9.9% stake in Credit Suisse in October for $1.5 billion, making it an anchor investor in the bank’s turnaround plan. Had the bank increased its shareholding in Credit Suisse beyond the 9.9% level, it would have been subjected to additional regulatory obligations.

☆ Can the U.S. See the Truth About China?
▼ + stars: | 2023-03-27 | by ( David Marchese | ) www.nytimes.com time to read: +14 min

Photo illustration by Bráulio Amado Talk Can the U.S. See the Truth About China? To see China solely as trying to displace the United States is only going to stoke more fears. The Chinese people believe that a substantially weakened Russia might not be in the interest of China, because if there were the sense that the United States needed to seek out an opponent, China would be next. And then also, the United States thinks that China wants to displace it. The industrial espionage stems from a lack of appreciation from the start of intellectual property, and the United States, by pushing China to do more intellectual-property protection, is actually good for China.

☆ Credit Suisse investor’s exit will zip some lips
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

LONDON, March 27 (Reuters Breakingviews) - The fate of Saudi National Bank’s (1180.SE) chairman may persuade other investors to maintain radio silence for a while. Asked by a television interviewer whether Saudi National Bank would invest more money into Credit Suisse, Al Khudairy replied “absolutely not”. Although SNB lost more than $1 billion on its Credit Suisse investment, Gulf investors are unlikely to stop investing in banks globally. Indeed, the Saudi bank was part of an investor group that proposed injecting around $5 billion into Credit Suisse as an alternative to the UBS deal, the Wall Street Journal reported. But big bank investors may avoid appearing on live television for a while.

☆ Did UBS Just Get the Deal of the Decade?
▼ + stars: | 2023-03-23 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Did UBS get the deal of the decade with Credit Suisse , or a decade of headaches? The investor debate is just getting started, but the answer to both questions might be yes. UBS certainly got a good price. Then there is the controversial write-off of Credit Suisse’s $17 billion in AT1 bonds. The lawsuits will come, but the decision was taken by the Swiss regulator rather than UBS, so the bank shouldn’t have to bear any costs.

Executives at UBS Group AG, which until recently competed with rival Credit Suisse Group AG to win business from Asia’s biggest companies and richest people, must now tackle the thorny question of how to combine the two banks in the region. That is just one conundrum facing senior executives at the banking giant following its acquisition of Credit Suisse for $3.25 billion, an emergency deal orchestrated by the Swiss government. But it is a critical one for a bank that has long seen Asia as a key growth market, particularly for wealth management—where banks offer services to the ultrarich.

☆ Credit Suisse rescue creates bank twice the size of Switzerland's economy
▼ + stars: | 2023-03-23 | by ( Hanna Ziady | ) edition.cnn.com time to read: +9 min

London CNN —The last-minute rescue of Credit Suisse may have prevented the current banking crisis from exploding, but it’s a raw deal for Switzerland. An aerial view of the headquarters of Credit Suisse, center, and UBS, left, at Paradeplatz in Zurich, Switzerland on Sunday, 19 March, 2023. Credit Suisse is “part of Switzerland’s identity,” said Hans Gersbach, a professor of macroeconomics at ETH university in Zurich. “The Credit Suisse Swiss bank is a fine asset that we are very determined to keep,” Kelleher said Sunday. Integration is difficultAt $3.25 billion, UBS got Credit Suisse for 60% less than the bank was worth when markets closed two days prior.

☆ Swiss CoCo litigation may have a broader payoff
▼ + stars: | 2023-03-23 | by ( Neil Unmack | ) www.reuters.com time to read: +4 min

LONDON, March 23 (Reuters Breakingviews) - Credit Suisse’s (CSGN.S) CoCos are shaping up to be the bondholder litigation case of the century. Investors are in uproar over the government’s decision to wipe out Credit Suisse’s Additional Tier 1 securities over the weekend, while preserving 3 billion Swiss francs for shareholders. They can argue that state support for Credit Suisse did not represent a viability event because the authorities injected liquidity but not capital. Credit Suisse’s AT1 bonds are currently trading at around 6% of par value, rather than the zero the Swiss authorities declared them to be worth. Some Credit Suisse AT1 bondholders are seeking legal advice.

☆ Credit Suisse’s ‘Bail-In’ Bonds Made an Easy Target for Politicians
▼ + stars: | 2023-03-22 | by ( Stephen Wilmot | ) www.wsj.com time to read: 1 min

Switzerland’s decision to give priority to shareholders over some bondholders in its rescue of Credit Suisse is counterintuitive for finance folk. But it has a political logic and, in bank failures, politics matters. Financial markets have broadly welcomed the takeover of Credit Suisse by UBS arranged by Swiss authorities over the weekend. After an initial panic, European bank stocks rose on Monday, and they were up almost 4% on Tuesday in a further sign that the deal has calmed investor nerves.

☆ Swiss CoCo shakeout may yet help bank regulators
▼ + stars: | 2023-03-22 | by ( Neil Unmack | ) www.reuters.com time to read: +3 min

LONDON, March 22 (Reuters Breakingviews) - Switzerland’s forced merger of Credit Suisse (CSGN.S) with UBS (UBSG.S) has caused a real stink. European regulators on Monday mobilised to calm debt investors after Swiss authorities chose to write off 16 billion Swiss francs of Credit Suisse’s Additional Tier 1 CoCos. Both the Bank of England and European regulators pledged on Monday to respect the bank rescue hierarchy that says shareholders should lose money before debt. A case in point: only last year the already creaking Credit Suisse chose to redeem a bond. Follow @Unmack1 on TwitterCONTEXT NEWSPrices of contingent capital securities, a kind of junior ranking loss-absorbing bank debt, fell after bonds issued by Credit Suisse were wiped out following its takeover by UBS.

DUBAI—Riding an oil-price boom last year, Saudi Crown Prince Mohammed bin Salman directed government-backed Saudi National Bank to make a $1.5 billion investment in Credit Suisse Group AG that his financial advisers harbored doubts about, according to people familiar with the matter. Now, the Saudi investment is almost wiped out after Credit Suisse’s emergency merger with UBS Group AG. Credit Suisse’s meltdown also erased billions of dollars in investments made by Qatar’s sovereign fund and the Saudi-based Olayan family, making the Persian Gulf one of the biggest losers from a slide in financial stocks since the collapse of two U.S. banks last week.

☆ Credit Suisse went the way of Bear Stearns in 2008. But this crisis is different
▼ + stars: | 2023-03-21 | by ( Hanna Ziady | ) edition.cnn.com time to read: +9 min

A sign of Credit Suisse pictured behind a sign of UBS in Zurich on March 18, 2023. The Swiss government said Tuesday it had ordered Credit Suisse to temporarily suspend the payment of some bonuses, including share awards, to bank staff. Credit Suisse is the first “global systemically important” bank to be rescued since 2008. Yet despite its importance to the financial system, most analysts are not expecting Credit Suisse’s demise to mark the beginning of another global financial crisis. “It’s possible that a vicious circle develops, in which credit tightens, the real economy deteriorates, and default rates start to rise,” he said.

☆ Merchandise from Credit Suisse such as hats, bags and gold bars are being sold online
▼ + stars: | 2023-03-21 | by ( Anna Cooban | ) edition.cnn.com time to read: +2 min

A ski hat adorned with Credit Suisse's logo had received as many as 46 bids on online Swiss marketplace Ricardo.ch by Tuesday, March 21. From ricardo.chAs many as 46 bidders were angling Tuesday to buy a blue and red Credit Suisse ski hat, priced at 111 Swiss francs ($120) on online Swiss marketplace Ricado.ch. One seller has listed a black cap, adorned with “Credit Suisse Risk Management Intern 2023,” for 35 Swiss francs ($38) on online reseller Tutti.ch. Vintage Credit Suisse stamps, notepads and watches are also being offered for sale. Hats, bags and gold bars emblazoned with Credit Suisse's logo popped up on resale sites just hours after the 167-year-old bank was taken over by rival UBS.

☆ Credit Suisse’s Death Gives Birth to New Type of Bank Crisis
▼ + stars: | 2023-03-20 | by ( Stephen Wilmot | Telis Demos | ) www.wsj.com time to read: 1 min

With Credit Suisse , investors just got their first, messy view of what happens when a big global bank fails in the post-2008 era. UBS agreed to buy its local rival over the weekend in a historic deal brokered by Swiss regulators. Credit Suisse shareholders will get UBS shares that were worth the equivalent of about $3.25 billion before the market opened on Monday, and less after the acquirer’s stock fell about 5% on Monday morning. Credit Suisse had a market value of some $8 billion at the end of last week and a tangible book value of $45 billion.

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