Investors in Asia are joining international lawsuits against the Swiss government for its handling of affairs during the takeover of Credt Suisse, the iconic but troubled bank. Authorities in Switzerland forced Credit Suisse to merge with rival UBS to prevent own collapse.

Though the takeover averted a catastrophe in Swiss banking system, it made bonds worth USD 17 billion held by investors worthless.

An anonymous investor quoted by BBC had bought USD 500000 worth of bonds in January. The investor took the decision even after several problems in the bank.

"Whenever I spoke to them, the bank gave me constant reassurances that this was just a blip, so I decided to go for it. It didn't feel like I was gambling," BBC quoted the investor as saying.

The type of bonds bought in this case were reportedly AT1, a riskier type of bond the value of which can be written down to zero. This is something that happened when Credit Suisse was taken over by UBS.

Now, dozens of bondholders in Singapore are joining hands to hold the Swiss government responsible. The main grievance is the manner in which the merger was conducted.

The investors reportedly claim that terms of bonds should have made them first to be compensated when the bank was on the brink of collapse. The bondholders were to be given priority over shareholders. However, shareholders were allowed to exchange their Credit Suisse shares with UBS shares.

This in effect means that shareholders got something but bondholders did not.

The legal firm, which is representing bondholders, has alleged that the Swiss regulator's decision was "an unlawful action" and that it had "devastating consequences on thousands of retail and small investors globally."

Bondholders who talked to BBC expressed frustration after losing their money and&nbsp;questioned Switzerland's banking reputation.

"We're losing sleep over this. It should have been a rock solid investment, but now I think the reputation of Switzerland and Swiss banks has gone down the tube," said an Asian investor quoted anonymously by BBC.

"Who in the world is going to trust Switzerland anymore?"

(With inputs from agencies) 
 
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Investors in Asia are joining international lawsuits against the Swiss government for its handling of affairs during the takeover of Credt Suisse, the iconic but troubled bank.

Investors in Asia are joining international lawsuits against the Swiss government for its handling of affairs during the takeover of Credt Suisse, the iconic but troubled bank. Authorities in Switzerland forced Credit Suisse to merge with rival UBS to prevent own collapse. Though the takeover averted a catastrophe in Swiss banking system, it made bonds worth USD 17 billion held by investors worthless. An anonymous investor quoted by BBC had bought USD 500000 worth of bonds in January. The investor took the decision even after several problems in the bank. "Whenever I spoke to them, the bank gave me constant reassurances that this was just a blip, so I decided to go for it. It didn't feel like I was gambling," BBC quoted the investor as saying. The type of bonds bought in this case were reportedly AT1, a riskier type of bond the value of which can be written down to zero. This is something that happened when Credit Suisse was taken over by UBS. Now, dozens of bondholders in Singapore are joining hands to hold the Swiss government responsible. The main grievance is the manner in which the merger was conducted. The investors reportedly claim that terms of bonds should have made them first to be compensated when the bank was on the brink of collapse. The bondholders were to be given priority over shareholders. However, shareholders were allowed to exchange their Credit Suisse shares with UBS shares. This in effect means that shareholders got something but bondholders did not. The legal firm, which is representing bondholders, has alleged that the Swiss regulator's decision was "an unlawful action" and that it had "devastating consequences on thousands of retail and small investors globally." Bondholders who talked to BBC expressed frustration after losing their money and questioned Switzerland's banking reputation. "We're losing sleep over this. It should have been a rock solid investment, but now I think the reputation of Switzerland and Swiss banks has gone down the tube," said an Asian investor quoted anonymously by BBC. "Who in the world is going to trust Switzerland anymore?" (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Credit Suisse: Bondholders in Asia sue Swiss government after wipeout

The hastily arranged alliance of Credit Suisse and UBS could trigger a loss of 36,000 jobs across the world, according to German media. The management brought in to wade through the stormy waters of the merger may be looking to cut between 20 per cent to 30 per cent of the workforce, meaning somewhere between 25,000 to 36,000 could end up losing their jobs, reported SonntagsZeitung.

The hastily arranged alliance of Credit Suisse and UBS could trigger a loss of 36,000 jobs across the world, according to German media. The management brought in to wade through the stormy waters of the merger may be looking to cut between 20 per cent to 30 per cent of the workforce, meaning somewhere between 25,000 to 36,000 could end up losing their jobs, reported SonntagsZeitung. UBS and Credit Suisse employ 72,000 and 50,000 people worldwide respectively. Switzerland, the base of Credit Suisse, may alone see a cut of 11,000 jobs. Meanwhile, jobs in the US could also be at severe risk, the publication stated. The release of the report comes in the same week when UBS announced it was bringing its former chief executive Sergio Ermotti to handle the absorption of troubled rival Credit Suisse. WATCH | Why you should be worried if Credit Suisse collapses Apart from thousands losing their jobs, investors have also lost billions. Reportedly, over $17.3 billion worth of bonds issued by Credit Suisse bank have become worthless after UBS came in with the takeover bid. Under the takeover deal, UBS will be writing down the bank's additional tier 1 (AT1) bonds to increase core capital. “The extraordinary government support will trigger a complete write-down of the nominal value of all AT1 shares of Credit Suisse in the amount of around 16 billion [Swiss francs],” said Swiss regulator FINMA. The AT1 bonds were primarily created for the failing banks to absorb losses, thereby reducing the chances of a taxpayer-funded bailout. Because of the higher risks, the AT1 bonds provided a greater yield than most other bonds and they became a quick favourite of institutional investors. ALSO READ | Over $17 billion worth of bonds become zero after Credit Suisse takeover by UBS After reports came in that Credit Suisse had collapsed, the Swiss government stepped up and arranged a takeover by the UBS Group for $3.25 billion. The takeover was aimed at preventing economic turmoil from spreading throughout the country and beyond. (With inputs from agencies) WATCH WION LIVE HERE:

Hastily arranged marriage of UBS-Credit Suisse could lead to loss of 36,000 jobs: Report

UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse.

Ermotti, who was the bank's top executive for nine years and led a turnaround following the 2008 global financial crisis, will take over next Wednesday from CEO Ralph Hamers.

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Hamers took up the job in November 2020 and will remain at UBS during a transition period "to ensure a successful closure of the transaction and a smooth handover," the bank said in a statement.

UBS credited Ermotti, who is now chairman of insurer Swiss Re, for having "cut its footprint" and changing the culture of the bank&nbsp;and it pointed to his experience in bringing big financial institutions together.

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The hastily arranged, USD 3.25 billion deal for Credit Suisse aimed to stem the upheaval in the global financial system after the collapse of two US banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland's second-largest bank to tank and customers to pull out their money.

Swiss authorities urged UBS to take over its smaller rival after the central bank's plan for Credit Suisse to borrow up to 50 billion francs (USD 54 billion) failed to reassure investors and customers. The Swiss executive branch passed emergency measures to bypass shareholder approval.

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UBS Chairman Colm Kelleher said Wednesday that he called Ermotti shortly after the emergency deal was arranged on March 19, which involved Swiss regulators, the federal government and top executives at both banks.

"This is the biggest single financial transaction since 2008. That brings significant execution risk," Kelleher said on a conference call.

Swiss lawmakers and academics have raised concerns that the deal could create an unwieldy Swiss banking behemoth, while UBS executives said regulatory issues loom internationally before the deal can close.

Many Credit Suisse customers have expressed regret at the looming disappearance of a 167-year-old bank that has been a pillar of Switzerland's renowned banking and financial industry. 
 
(With inputs from agencies) 
 
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UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse.

UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse. Ermotti, who was the bank's top executive for nine years and led a turnaround following the 2008 global financial crisis, will take over next Wednesday from CEO Ralph Hamers. Also Read | Marriage a license to rape? India's top court to hear pleas on marital rape; these countries criminalise it Hamers took up the job in November 2020 and will remain at UBS during a transition period "to ensure a successful closure of the transaction and a smooth handover," the bank said in a statement. UBS credited Ermotti, who is now chairman of insurer Swiss Re, for having "cut its footprint" and changing the culture of the bank and it pointed to his experience in bringing big financial institutions together. Also Read | Nashville school shooter sent a cryptic warning text to ex-classmate, it only makes sense now The hastily arranged, USD 3.25 billion deal for Credit Suisse aimed to stem the upheaval in the global financial system after the collapse of two US banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland's second-largest bank to tank and customers to pull out their money. Swiss authorities urged UBS to take over its smaller rival after the central bank's plan for Credit Suisse to borrow up to 50 billion francs (USD 54 billion) failed to reassure investors and customers. The Swiss executive branch passed emergency measures to bypass shareholder approval. Watch | Israel protests: US President Joe Biden urges Netanyahu to abandon judicial overhaul × UBS Chairman Colm Kelleher said Wednesday that he called Ermotti shortly after the emergency deal was arranged on March 19, which involved Swiss regulators, the federal government and top executives at both banks. "This is the biggest single financial transaction since 2008. That brings significant execution risk," Kelleher said on a conference call. Swiss lawmakers and academics have raised concerns that the deal could create an unwieldy Swiss banking behemoth, while UBS executives said regulatory issues loom internationally before the deal can close. Many Credit Suisse customers have expressed regret at the looming disappearance of a 167-year-old bank that has been a pillar of Switzerland's renowned banking and financial industry. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

UBS brings back Sergio Ermotti as CEO for Credit Suisse takeover after deal

UBS on Sunday (March 19) agreed to buy the troubled rival bank Credit Suisse for $3.25&nbsp;billion after the two banks held marathon talks, the Financial Times reported.

Last week, Credit Suisse shares lost a quarter of their value. On Friday, the bank was valued at the equivalent of about $8 billion at market close.&nbsp;

UBS had been in talks to finalise a mammoth takeover of Credit Suisse and reassure investors before the markets reopened Monday. Switzerland's banks have been in urgent negotiations throughout the weekend, with the government, central bank, and financial regulators all involved.

Speaking to Reuters, Beat Wittmann, the chairperson and partner of Porta Advisors, said on Sunday that the deal made a lot of sense.&nbsp;

“And if it's diligently and fairly executed and of course, also a new leadership on the board level and CEO level announced that we'll not only fully restore trust in the system, but I think this would create a very, very strong bank. And if well-managed, then, of course, UBS would do an absolutely fantastic deal here and would be significantly strengthened in that core strategy. Of course, there will be antitrust issues and some businesses will have to be sold out or carved out in order to meet regulatory requirements,” Wittmann said.&nbsp;

“Well, I have been surprised because the market capitalisation on Friday (March 17) was $8 billion. So this is $7 billion less, this offer. And I think that this will cause a lot of discussions. Why? Because it will raise a lot of questions about why this valuation is so low and why the board of Credit Suisse and also the Swiss authorities have waited for so long to address this problem. And if this valuation remains at $1 billion, then it just means that the problems and the legacies, the situation of Credit Suisse is in a much worse shape than expected or seen by Friday,” he added.&nbsp;

Reuters earlier reported that UBS was seeking government guarantees of about $6 billion for the takeover of Credit Suisse. A source told Reuters the guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges.&nbsp;

The source added that talks to resolve the crisis of confidence in Credit Suisse were encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combined.&nbsp;

(With inputs from agencies)

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UBS on Sunday (March 19) agreed to buy the troubled rival bank Credit Suisse for $3.25 billion after the two banks held marathon talks, the Financial Times reported.

UBS on Sunday (March 19) agreed to buy the troubled rival bank Credit Suisse for $3.25 billion after the two banks held marathon talks, the Financial Times reported. Last week, Credit Suisse shares lost a quarter of their value. On Friday, the bank was valued at the equivalent of about $8 billion at market close. UBS had been in talks to finalise a mammoth takeover of Credit Suisse and reassure investors before the markets reopened Monday. Switzerland's banks have been in urgent negotiations throughout the weekend, with the government, central bank, and financial regulators all involved. Speaking to Reuters, Beat Wittmann, the chairperson and partner of Porta Advisors, said on Sunday that the deal made a lot of sense. “And if it's diligently and fairly executed and of course, also a new leadership on the board level and CEO level announced that we'll not only fully restore trust in the system, but I think this would create a very, very strong bank. And if well-managed, then, of course, UBS would do an absolutely fantastic deal here and would be significantly strengthened in that core strategy. Of course, there will be antitrust issues and some businesses will have to be sold out or carved out in order to meet regulatory requirements,” Wittmann said. “Well, I have been surprised because the market capitalisation on Friday (March 17) was $8 billion. So this is $7 billion less, this offer. And I think that this will cause a lot of discussions. Why? Because it will raise a lot of questions about why this valuation is so low and why the board of Credit Suisse and also the Swiss authorities have waited for so long to address this problem. And if this valuation remains at $1 billion, then it just means that the problems and the legacies, the situation of Credit Suisse is in a much worse shape than expected or seen by Friday,” he added. Reuters earlier reported that UBS was seeking government guarantees of about $6 billion for the takeover of Credit Suisse. A source told Reuters the guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges. The source added that talks to resolve the crisis of confidence in Credit Suisse were encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combined. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

UBS agrees to buy Credit Suisse for $3.25 billion: Report