2023-07-03 04:58:01 ET
UBS ( NYSE: UBS ) is aiming to keep away from the $10B support extended by the Swiss government to cover any losses realized when winding down Credit Suisse's assets, the Financial Times reported citing two people familiar with the matter.
As a part of Credit Suisse's takeover, the Swiss government agreed to shield UBS ( UBS ) from losses of up to CHF 9B (~$10B) realized when winding down assets that are non-core to UBS' business. UBS ( UBS ) will be responsible for the first CHF 5B (~$5.6B) of the losses.
UBS ( UBS ) executives have grown confident that losses from winding down parts of Credit Suisse's investment bank will remain below CHF 5B, FT reported .
UBS ( UBS ) hopes to not call on the government backstop during its Q2 earnings report on August 31, which would shield Swiss taxpayers from covering the losses, amid political backlash ahead of national elections in October.
However, the decision to refrain from using the backstop - which is yet to be finalized - would likely be due to business reasons rather than political, the report said citing a third source.
When Credit Suisse's takeover was announced, the Swiss government and UBS ( UBS ) asserted that the focus was to "minimize potential losses and risks so that recourse to the federal guarantee is avoided to the greatest extent possible."
UBS ( UBS ) suspended a $6B stock buyback program in the wake of the takeover, but is reportedly keen to restart it. When reporting Q2 results, the lender is also expected to announce if it will maintain Credit Suisse's domestic bank.
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UBS aims to skip $10B backstop from Swiss govt for Credit Suisse deal - report