London Daily

Focus on the big picture.
Wednesday, Oct 21, 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.

Newsletter

Related Articles

0:00
0:00
Close
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
Labour Party Instructs Local Council Groups to Sever Power-Sharing Accords with Green Party Over New Controversial Policy Positions
Institute for Fiscal Studies Warns of Thirty-Five Billion Pound Fiscal Gap Ahead of Chancellor John Healey Upcoming Autumn Budget
House of Lords Backs Landmark Legislative Amendment to Decriminalize Abortion Across England and Wales
United Kingdom Defence Secretary Wes Streeting Travels to Pentagon for High-Level Strategic Talks Amid Escalating Tensions Over Ukraine and United States Policy Shifts
Bank of England and International Monetary Fund Officials Issue Urgent Warnings Regarding Potential Artificial Intelligence Financial Market Shocks
Reform UK Faces Severe Political Fallout and Scrutiny After Undercover Media Investigations Reveal Systemic Racism Among Candidates
Former Democratic Unionist Party Leader Jeffrey Donaldson Sentenced to Fifteen Years in Prison Following Landmark Child Sexual Abuse Trial
House of Lords Votes to Amend Schools Bill Implementing Comprehensive Social Media Ban for Children Under Sixteen Years of Age
International Monetary Fund Upgrades United Kingdom Growth Forecast for Two Thousand Twenty-Six While Warning of Energy-Driven Inflation Pressures
Competition and Markets Authority Launches Formal Inquiry Into Corporate Artificial Intelligence Partnerships
×