European Commission gives the nod to UBS takeover of Credit Suisse
The formalities are expected to complete by June
The European Commission has approved the takeover by the UBS Group of its embattled banking rival Credit Suisse. It has ruled that the merger will not harm competition in Europe.
The European Commission, which runs the EU’s powerful anti-trust regulator, said, “The merger would not significantly reduce competition in the markets where their activities overlap,” within the European Economic Area.
Following fears of contagion from the collapse of three US regional banks, in March, Switzerland’s biggest bank, UBS, swooped in to buy out Credit Suisse; the country’s second-largest, in a government-brokered deal worth 3 billion Swiss francs ($3.3 billion).
Rocked by the stateside turmoil, investors had sold Credit Suisse shares, forcing the Swiss government to intervene alongside the Swiss National Bank (SNB), the central bank, and the Financial Market Infrastructure Ordinance (FINMA), the financial regulators.
Concerns have been raised about the risks from the megabank and Credit Suisse’s leadership on its handling. Prior to the merger, Credit Suisse was shaken due to a series of scandals, including the bankruptcy of British financial services firm Greensill.
However, the Commission said the combined bank will face “significant competitive pressure from a wide range of competitors in the markets, including several major global banks, specialist providers, and strong local players.”
Investment banking represents 25.2 percent of UBS’s turnover, compared to nearly 20.6 percent at Credit Suisse.