Swiss Financial Watchdog Clears UBS’s Takeover of Credit Suisse

Switzerland’s financial watchdog, the Swiss Financial Market Supervisory Authority (FINMA), announced on Wednesday that it has approved the takeover of Credit Suisse AG by UBS Group AG. This decision follows a thorough investigation that determined the merger would not harm competition in any domestic market.

FINMA’s Approval and Analysis

FINMA approved the merger without imposing any conditions on the newly formed bank. The watchdog conducted comprehensive market analyses and evaluated numerous statements from competitors, associations, and customers. “Our findings conclude the oversight of the deal,” FINMA stated, emphasizing that the merger would not eliminate effective competition in any market segment, despite UBS strengthening its market position in certain sub-segments.

Background of the Merger

The legal merger between UBS and Credit Suisse was formally completed in May, 14 months after regulators brokered the deal to prevent Credit Suisse’s collapse in March 2023. The advance approval by FINMA, granted under the country’s Cartel Act in March 2023, was deemed necessary to protect creditors and prevent greater harm to both the Swiss financial center and international financial markets.

Regulatory Process and Coordination

FINMA took over the approval process from the Swiss Competition Commission (COMCO) as part of the statutory process for rescue cases. This ensured creditors were paid back, and FINMA confirmed it had coordinated with COMCO regarding the competition investigation’s conclusion. The investigation assessed the merger’s implications for Swiss retail banking, asset management, corporate banking, fee structures, and market access.

UBS’s Integration Plan

UBS has announced plans to complete the integration of the wider groups by the end of 2026, aiming to reduce costs by $10 billion. The merger comes after Credit Suisse faced severe financial troubles in March 2023, losing investor and customer confidence due to consecutive quarterly losses, management reshuffles, scandals, and rising litigation and regulatory costs.

FINMA’s approval marks a significant milestone in the UBS-Credit Suisse merger, ensuring that the new entity does not disrupt market competition. The watchdog’s decision reflects a meticulous regulatory process designed to safeguard the stability of the Swiss and international financial markets.