© Reuters. The logos of Swiss financial institution Credit Suisse and UBS are seen in Geneva, Switzerland, June 7, 2023. REUTERS/Denis Balibouse/File picture
By Engen Tham and Selena Li
SHANGHAI/HONG KONG (Reuters) -UBS has recognized at the least 4 international locations, together with South Korea and India, as being “slow” to grant the regulatory approvals wanted to finish its takeover of Credit Suisse, an inner doc reviewed by Reuters reveals.
The Swiss banking large has additionally highlighted Ireland and Saudi Arabia as “slow jurisdictions” in granting licences, in response to the beforehand unreported doc which was dated Sept. 6 and was circulated to UBS workers globally.
Prepared by UBS after a world evaluate to evaluate the timeline of regulatory approvals needed for the combination of Credit Suisse to finish, the doc stated uncooperative regulators might put transactions such as the Swiss financial institution deal in danger.
The doc says that “a single non-cooperative regulator can jeopardize the timeline of the parent bank merger and other transactions”, impacting different associated integration offers.
The uncertainties might result in winding down companies and asset gross sales, when UBS faces “difficult jurisdictions or regulators”, the Swiss financial institution stated within the doc.
Credit Suisse, which was Switzerland’s second-biggest financial institution, suffered years of scandals and losses earlier than it needed to be rescued in March in a state-engineered takeover by UBS.
Although UBS accomplished the takeover in June, it nonetheless wants approvals from regulators in markets the place each the banks function for the authorized completion of the primary rescue of a world financial institution for the reason that 2008 monetary disaster.
Credit Suisse declined to remark. UBS didn’t reply to a request for remark. Spokespeople for central banks in South Korea, India, Ireland, and Saudi Arabia additionally didn’t instantly reply to Reuters requests for remark.
It is regular for big merger and acquisition offers to be delayed by the myriad regulatory approvals wanted to shut a deal, and in only a few circumstances transactions do get derailed attributable to objections raised by some regulators.
The first-ever merger of two international systemically essential banks has created each alternatives and dangers for UBS, which has been working on integrating Credit Suisse’s companies.
Last month UBS stated it anticipated the takeover to be accomplished in 2024. The financial institution’s inner doc confirmed the method may very well be completed as quickly as May subsequent yr.
‘CHANGE IN CONTROL’
In South Korea, it could take as much as 18 to 22 months to acquire new licences, whereas in Ireland the method might take as much as two years, and in Saudi Arabia as much as 12 months, the doc stated.
The regulator in India might take a minimal of six months to approve the establishing of a brand new department, it added.
UBS additionally stated within the doc that for Russia, a “change in control” approval might by no means be obtained as this may very well be a politically pushed choice.
In a May disclosure filed with the U.S. securities regulator, UBS stated that its publicity to Russia contributed $98 million to its complete rising market publicity of $18.6 billion as of Dec. 31, 2022.
Last month, a Moscow court docket banned UBS and Credit Suisse from disposing of shares of their Russian subsidiaries, Reuters reported, citing court docket paperwork.
Laws launched after Russia despatched troops to Ukraine in February final yr have made presidential approval needed for banks to chop ties with their native enterprise, whereas a authorities fee evaluations all asset transfers involving Western corporations.
Russia’s central financial institution and finance ministry didn’t instantly reply to requests for remark.
The majority of markets UBS and Credit Suisse function in grant automated switch of all belongings and liabilities, which they time period common succession, whereas seven of 51 jurisdictions don’t recognise the apply, the doc confirmed.
Those seven markets are Bahrain, Dubai, Abu Dhabi, Japan, Saudi Arabia, Thailand, Turkey, stated the doc, including that “individual transfers are very burdensome, time-intensive and entail the risk of missing consents” in these jurisdictions.
