Yahoo Finance UBS Group (UBS) Closes UBS AG and Credit Suisse AG Merger
UBS Group AG UBS has achieved a milestone in its integration with Credit Suisse by finalizing the previously announced merger of UBS AG and Credit Suisse AG. The merger was completed within the planned timeline, thanks to significant backing from regulators around the world.
Shares of UBS Group rose 2.1% with the announcement of the deal's closure.
The acquisition is expected to allow UBS Group to fortify its position as a preeminent global wealth manager.
Merger & Other Details
Following this merger, Credit Suisse AG has been deregistered in the Commercial Register of the Canton of Zurich and no longer exists as a separate business. UBS AG now owns all of Credit Suisse AG's rights and obligations, including the existing debt instruments.
With this merger, clients and operations from Credit Suisse will be integrated with UBS Group platforms over time, in accordance with business, client and product-related requirements. While Credit Suisse AG clients have turned into UBS AG clients due to the merger, they will engage with UBS Group using current Credit Suisse platforms and tools for the time being, unless otherwise specified.
As UBS Group progresses with its long-term ambitions, it is crucial to increase its focus on sustainable, strategic growth, especially in the Americas and Asia-Pacific. To execute short and long-term priorities, the company announced changes to its Group Executive Board that are subject to final regulatory approval, effective Jul 1, 2024.
UBS Group also announced that the transition to a single U.S. intermediate holding company is scheduled for Jun 7, while the merger of Credit Suisse (Schweiz) AG and UBS Switzerland AG is scheduled in the third quarter of 2024. Both these transitions are subject to remaining regulatory approvals.
Conclusion
With this merger, UBS Group has reached a milestone on its integration path. The merger of its parent banks is crucial for simplifying client transfer to UBS Group infrastructure. It will also lead to the next steps related to cost, capital, finance and tax benefits, effective from the second half of 2024. The company is on track to complete the full integration process by 2026-end.
As UBS Group enters this transitory phase of operational simplification, it remains dedicated to its core values of servicing clients, executing strategy, investing in people and providing a solid economic foundation in the communities where it operates.
In line with its business restructuring plans, UBS Group is likely to wind down its Non-Core and Legacy portfolio, releasing more than $6 billion of capital by 2026-end. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by 2026-end compared with the 2022 levels. The bank has already achieved $1 billion in gross cost savings in the first quarter of 2024 and aims to achieve another $1.5 billion by the end of this year.
Price Performance
UBS Group’s shares have risen 13.2% on the NYSE over the past six months compared with the industry’s 15.9% growth.
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UBS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Banks
In May 2024, Provident Financial Services PFS completed its previously announced merger with Lakeland Bancorp, Inc. This acquisition combines two of New Jersey’s complementary banking platforms to form a super-community bank.
The combined franchise should benefit from incremental revenue growth opportunities. It will include Provident Financial’s fee-based insurance and wealth management businesses, as well as Lakeland Bancorp’s growth in asset-based lending, equipment lease financing and mortgage warehouse lending.
In the same month, SouthState Corporation SSB entered into a merger agreement to acquire Independent Bank Group, Inc. IBTX in an all-stock transaction valued at approximately $2 billion.
The acquisition should further help SSB to diversify its footprint into similar high-growth regions.
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