UBS Buys Credit Suisse For $3.25BN

 

Credit Suisse has been taken over by UBS for $3.25BN, the shareholders (who did not get to vote about the deal) have taken a 70% haircut.

Central Banks have agreed $100BN credit line.

It has been a long time coming but, as this thread explains, the demise of Credit Suisse is hardly a surprise.

🧵THREAD: 1) Credit Suisse is no more.

Here’s a look at how decades of scandals, legal issues and management upheavals led the bank to an abrupt end. https://t.co/7Oy86n4IBt

— Bloomberg (@business) March 20, 2023

It is likely that other European banks are also on the precipice.

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Don't Trust Financial "Experts" - UBS Way Off Beam!

UBS ran 10,000 computer simulations on the World Cup and determined Germany will win https://t.co/Y4KyHJDuBa pic.twitter.com/jDmaU4oiXf

— Bloomberg (@business) May 17, 2018

The Banking List of Shame

UK, US and Swiss authorities have fined five banks more than £2BN over failings that led to manipulation of the foreign exchange markets.

For good measure The Bank of England dismissed its chief currencies dealer following an investigation, for "breaching internal policies".

As per the Telegraph:

Total Fines

Financial Conduct Authority
• Citibank: £225,575,000
• HSBC: £216,363,000
• JPMorgan: £222,166,000
• RBS: £217,000,000
• UBS: £233,814,000
Commodities and Futures Trading Commission
• Citibank: $310m
• JPMorgan: $310m
• RBS: $290m
• UBS: $290m
• HSBC: $275m
Finma
• UBS: 134m Swiss francs

Well done lads, you are a "credit" to the "profession"!

In case anyone is wondering why Barclays isn't mentioned, it is still being investigated.

UBS Fined $1.5BN

Last Friday I wrote that UBS was to be fined $1Bn for its role in the LIBOR rate fixing scandal.

I was wrong, UBS has in fact been fined $1.5BN.

Mea culpa!

UBS $1BN LIBOR Settlement

UBS is, according to the Telegraph, close to agreeing a settlement with UK and US regulators on LIBOR rigging.

The bank is expected to announce next week that it has reached a combined $1BN deal with US and British authorities to settle an investigation into the role it is alleged to have played in rigging global borrowing rates.

To put the $1BN into context, LIBOR is the basis for $800 TRILLION of financial products. The banks that participated in its rigging would have made billions out of this over the years.

Additionally, UBS's bonus pool was $2.79BN in 2011.

Therefore shed no tears for them!

UBS Banker Kweku Adoboli Guilty of Fraud

A former UBS banker, Kweku Adoboli, has been found guilty of fraud after losing the bank $2.3BN in unauthorised trading.

UBS Redundancies Smokescreen

Whilst UBS is enveloped by the smokescreen of publicity derived from its mass culling (and handling of that mass culling) of staff today, it seems to have been a "good" day for it to also let the world know that it is under investigation in Singapore, along with other banks, for possible manipulation of Libor and other benchmark rates.

As per Reuters:

"These investigations focus on whether there were improper attempts by UBS (among others), either acting on our own or together with others, to manipulate LIBOR and other benchmark rates at certain times."

 

UBS - U've Been Sacked

UBS may well regret how it has handled informing its staff about their redundancies today.

The FT reports that UBS was one of the most popular trends on twitter, as the blogosphere flooded with comments describing the shock and resentment of staff.

According to the PR bullshit being spouted by UBS the redundancies are a ‘strategic acceleration from position of strength.’

Who hires these people, and why are they still in their jobs?

UBS Redundancies Update

Ralph Sinclair has tweeted the follwoing:

"From inside 100 Liverpool Street: "Whole desks are gone and there are people stood outside without access to the building."

UBS Redundancies

It seems that UBS is making some people redundant today and over the next three years (10,000 in total).

Sadly, as per Owen Callan, UBS is using the "old school" method of informing them.

People arrive at work, if their passes don't work they are ushered into a special room where they are told that they are on special leave.

Liborgate

Liborgate, despite the brief interlude provided by the chaff from the DFS over Standard Chartered, rumbles on.

The BBC reports that seven banks (HSBC, Royal Bank of Scotland Barclays, Citigroup, Deutsche Bank, JPMorgan and UBS), are to be questioned in the US for alleged Libor manipulation.

The US authorities will look to see if there is sufficient evidence to support a criminal prosecution.

The coming weeks will see much behind the scenes haggling between the banks, the regulatory authorities and governments, in order to avoid this going to court.

UBS Shoot Themselves In The Foot

UBS claim that supermarkets have been increasing their prices by 6%-6.5%, despite the fact that commodity price inflation indicates that rises should only be around 3%3%-3.5%.

The Telegraph quotes Paul Donovan, a UBS economist:

"That suggests there may be margin expansion in the supermarket sector… Prices are rising in excess of justifiable cost increases."

However, UBS then go to shoot themselves in the foot by noting that only 20%-25% of the price reflects the "commodity input".

A British Retail Consortium spokesman put the boot into the UBS report, by noting:

"There is no question that in the UK, customers pay less for their food than is the case in most other European countries. Food prices have not risen at anything like the same rate as commodity prices. It is clear that supermarkets are shielding customers from the full impact."

It would seem that UBS have tried to use the report to garner themselves some headlines. Unfortunately for UBS, the headlines that they have garnered are not particularly favourable to them.