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Wednesday, Oct 28, 2026

The One Big Winner And Many Losers Of UBS's Credit Suisse Crisis

The One Big Winner And Many Losers Of UBS's Credit Suisse Crisis

The UBS Group agreed to buy its smaller rival for about $3.3 billion in a share deal that includes extensive guarantees and liquidity provisions.

UBS Group AG is emerging as a rare winner in Credit Suisse Group AG's crisis after a historic, government-brokered deal that contains a raft of financial shock absorbers.

After a weekend of frantic talks to forge a solution before markets opened in Asia, the firm agreed to buy its smaller rival for about $3.3 billion in a share deal that includes extensive guarantees and liquidity provisions. Here are some of the big winners and losers to emerge from the deal.

The Winner: Ralph Hamers

UBS's chief executive officer will see the bank's wealth and asset management invested assets soar to about $5 trillion and got a special waiver to keep Credit Suisse's profitable Swiss unit that many analysts said was worth more than triple what UBS paid for the whole firm.

Ralph Hamers, the former ING Groep NV executive, and his team will have plenty to work through as they consider which businesses and people to keep, alter or jettison. But he'll have 56 billion francs of so-called badwill to help cover any writedowns, as well as 9 billion francs of guarantees from the Swiss government to take on certain losses. And the firm can access a huge liquidity line from the central bank.

While UBS will suspend its share buybacks for now, it said it's still committed to a progressive dividend.

The (Many) Losers:

Credit Suisse's Top Shareholders

Gulf investors old and new are hurting. Saudi National Bank's investment was stunning in its brevity: the lender lost 1.1 billion francs less than 15 weeks from when it finished buying its stake in Credit Suisse's latest capital raise. The firm thought it was buying at a bargain when it became the Swiss bank's largest shareholder just a few months ago. Saudi National Bank's chairman helped fuel the panic this week when he ruled out raising its stake in Credit Suisse.

The Qatar Investment Authority's pain came over a much longer period, as it first invested in the last financial crisis, but it likely lost an even greater amount. In addition to being the bank's second-biggest holder, it had owned in the past the firm's AT1 bonds that were written to zero in the deal, though it's unclear if QIA still held that debt. Shareholders won't even get to vote on this deal after Switzerland changed its rules to rush the merger through.

Ulrich Koerner

Credit Suisse's chief executive officer is expected to depart, having inherited a broken lender that he was unable to revive. Ulrich Koerner, who only took the top job last summer, had already mapped out a plan to cut back risk after a torrent of scandals and losses to focus more on wealth management. Bolder still was a plan to break out the bank's best-performing investment banking businesses. But the firm was unable to recover from a crisis of confidence that caused billions of dollars to exit in October. In recent days, the pressure intensified until the Swiss government was forced to step in.

Michael Klein

The former Citigroup Inc. investment bank head's grand plan to revive the First Boston brand and build it into a Wall Street advisory powerhouse now looks in ashes. Michael Klein, who had been tapped to lead the CSFB spinoff, was already in the process of selling his advisory boutique to Credit Suisse for a consideration of about $210 million when the bank's fortunes suddenly unraveled in recent weeks. While UBS Chairman Colm Kelleher didn't directly address CSFB at a press conference late Sunday, he did indicate that the firm was happy with its own investment bank and planned to cut back Credit Suisse's substantially as well as pare back risk.

AT1 Bondholders

Bond investors are typically better protected from losses than shareholders, but not in this case. The Swiss regulator will impose losses on $17 billion of high-risk debt known as Additional Tier 1 bonds that make up part of a buffer of debt and equity intended to prevent taxpayers from having to shoulder the bill for a bank's collapse. The total writedown marked the biggest loss yet for Europe's $275 billion AT1 market. Shareholders, who typically are first to take a hit in a writedown scenario, got at least a small consideration.

Swiss authorities, taxpayers

Finma became the first regulator to watch a bank deemed systemically important have to be rescued since the financial crisis. The Swiss government had to step in an provide billions of francs in guarantees to UBS and the central bank was forced to provide extensive liquidity backstops to facilitate the rescue, putting taxpayers at risk 15 years after they bailed out UBS. Swiss Finance Minister Karin Keller-Sutter acknowledged it was the only way to stabilize international financial markets. Lots of Swiss money is being put up to help absorb any shocks from the deal, from a 9 billion franc guarantee on possible losses to huge credit lines from the Swiss central bank.


...and the Late Exit


Harris Associates

For years, Harris Associates and stock picker David Herro were closely linked to the fate of Credit Suisse as its biggest shareholder. He'd been a vocal supporter of former CEO Tidjane Thiam during his tussles with the board after a spying scandal and stuck with the bank through years of scandals and losses. But, amid the latest restructuring plan in October and huge outflows, he finally threw in the towel. He said earlier in March that he'd exited the stake in recent months. While it's not clear at what price he sold at, he did manage to avoid the precipitous declines in the stock during recent weeks as the bank was pummeled by a crisis of confidence.

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