The Swiss banks updated the markets on the state of their merger process, pushing towards completing this in 2024.

UBS yesterday announced that it expects to complete its merger with fellow Zurich-headquartered Credit Suisse in 2024, rounding out an acquisition process brokered by the Swiss government earlier this year. The saga, along with the stories around Silicon Valley Bank and First Republic Bank, reminded global markets about fissures within parts of the world's banking system.

The holding companies of UBS and Credit Suisse merged on June 12. The board of directors of UBS has approved the execution of the merger, UBS said in a statement. 

“Following approvals from their respective boards, both entities have entered into a definitive merger agreement. The completion of the merger is subject to regulatory approvals and is expected to happen in 2024,” UBS said. 

In March this year, UBS, Switzerland’s largest bank, agreed to buy Credit Suisse after the latter bank’s shares slumped amidst a slew of scandals and missteps. UBS paid SFr3 billion ($3.23 billion) for its rival, a move that leaves Switzerland with one universal bank.

Last year, Credit Suisse announced moves to restructure its business lines, slash costs, reduce risk-weighted assets and free up capital. However, its shares remained under pressure. In the fourth quarter of 2022, clients pulled out a net SFr110 billion of assets. To add to its woes, the collapse of Silicon Valley Bank in the US earlier this year, for example, sharpened investor focus on banks perceived as having problems.

As UBS continues its integration of Credit Suisse after its takeover, a number of senior organizational changes have been announced, as reported here and here. As part of the deal, conducted at the urging of the Swiss authorities, holders of Credit Suisse’s Additional Tier 1 bonds – forms of buffer capital created for European banks after the 2008 crash – have had their bonds written down. This has sparked anger and a number of lawsuits, including from institutions such as PIMCO. As reports such as this in May showed, UBS faces a huge task of ensuring that the two organizations integrate while dealing with legacy legal and regulatory issues that have plagued Credit Suisse for years.