UBS has resolved the latest legacy issue related to its 2024 acquisition of Credit Suisse, paying the US Department of Justice (DOJ) $300 million.
Specifically, the settlement resolves a legacy matter related to outstanding obligations regarding Credit Suisse’s agreement with the DOJ back in 2017 for its legacy Residential Mortgage-Backed Securities (RMBS) business.
In an official announcement, UBS confirmed that “with this agreement, UBS has resolved another of Credit Suisse’s legacy issues, in line with its intention to resolve legacy matters at pace in a fair and balanced way and in the best interest of all its stakeholders.”
UBS confirmed its intention to take over Credit Suisse in March 2023 with the deal subsequently reported to be worth more than $3.25 billion.
First announced in 2023, UBS has now assumed all of Credit Suisse’s assets and liabilities as the bank merges into its business.
Notoriously, the deal between UBS and Credit Suisse was agreed without shareholders’ approval and pushed through under emergency ordinance, issued by the Swiss Federal Council.
At the time, Swiss regulators decided to pay Credit Suisse equity-holders CHF3 billion, whilst writing down the value of AT1 debtholders to zero, a move which raised some possible litigation concerns following announcement of the deal.