© Reuters. The logos of Swiss financial institution Credit score 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 no less than 4 international locations, together with South Korea and India, as being “gradual” to grant the regulatory approvals wanted to finish its takeover of Credit score Suisse, an inner doc reviewed by Reuters reveals.
The Swiss banking large has additionally highlighted Eire and Saudi Arabia as “gradual jurisdictions” in granting licences, based on the beforehand unreported doc which was dated Sept. 6 and was circulated to UBS employees globally.
Ready by UBS after a worldwide assessment to evaluate the timeline of regulatory approvals crucial for the combination of Credit score Suisse to finish, the doc mentioned uncooperative regulators may put transactions such because the Swiss financial institution deal in danger.
The doc says that “a single non-cooperative regulator can jeopardize the timeline of the father or mother financial institution merger and different transactions”, impacting different associated integration offers.
The uncertainties may result in winding down companies and asset gross sales, when UBS faces “tough jurisdictions or regulators”, the Swiss financial institution mentioned within the doc.
Credit score 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.
Though 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 worldwide financial institution for the reason that 2008 monetary disaster.
Credit score Suisse declined to remark. UBS didn’t reply to a request for remark. Spokespeople for central banks in South Korea, India, Eire, and Saudi Arabia additionally didn’t instantly reply to Reuters requests for remark.
It’s regular for giant merger and acquisition offers to be delayed by the myriad regulatory approvals wanted to shut a deal, and in only a few instances transactions do get derailed on account of objections raised by some regulators.
The primary-ever merger of two world systemically vital banks has created each alternatives and dangers for UBS, which has been engaged on integrating Credit score Suisse’s companies.
Final month UBS mentioned 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 Could subsequent yr.
‘CHANGE IN CONTROL’
In South Korea, it could take as much as 18 to 22 months to acquire new licences, whereas in Eire the method may take as much as two years, and in Saudi Arabia as much as 12 months, the doc mentioned.
The regulator in India may take a minimal of six months to approve the organising of a brand new department, it added.
UBS additionally mentioned within the doc that for Russia, a “change in management” approval could by no means be obtained as this may very well be a politically pushed resolution.
In a Could disclosure filed with the U.S. securities regulator, UBS mentioned that its publicity to Russia contributed $98 million to its whole rising market publicity of $18.6 billion as of Dec. 31, 2022.
Final month, a Moscow court docket banned UBS and Credit score Suisse from disposing of shares of their Russian subsidiaries, Reuters reported, citing court docket paperwork.
Legal guidelines launched after Russia despatched troops to Ukraine in February final yr have made presidential approval crucial for banks to chop ties with their native enterprise, whereas a authorities fee critiques all asset transfers involving Western corporations.
Russia’s central financial institution and finance ministry didn’t instantly reply to requests for remark.
Nearly all of markets UBS and Credit score Suisse function in grant automated switch of all property and liabilities, which they time period common succession, whereas seven of 51 jurisdictions don’t recognise the apply, the doc confirmed.
These seven markets are Bahrain, Dubai, Abu Dhabi, Japan, Saudi Arabia, Thailand, Turkey, mentioned the doc, including that “particular person transfers are very burdensome, time-intensive and entail the danger of lacking consents” in these jurisdictions.