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UBS and Credit Suisse Agree to Merge Their Parent Banks
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UBS Group AG (UBS - Free Report) and Credit Suisse Group AG’s board of directors have approved the merger between their parent banks namely UBS AG and Credit Suisse AG. This is a part of the integration process of Credit Suisse with UBS post their merger on Jun 12, 2023.
The merger agreement between the parent banks of the two holding companies is expected to be completed in 2024, subject to certain regulatory approvals.
Further, UBS continues to make arrangements for the planned merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG, which is expected to take place in 2024.
This merger move would bring an end to the independent functioning of Credit Suisse AG and would include the client migration of its core business to UBS. Reuters reported that, per UBS Group AG's chairman and chief executive officer (CEO), “The integration would not be a straightforward process and that from an operational perspective, 2024 will be a decisive year.”
Also, the CEO stated last month that synergies from the emergency takeover of Credit Suisse in March 2023 are expected to be realized in 2025 and 2026.
The acquisition benefits UBS as it fortifies its position as a preeminent global wealth manager, with more than $3.6 billion in wealth management assets as of the third-quarter 2023 end. Also, the combined entity has invested assets of more than $1.5 trillion in the asset management segment. As of Sep 30, 2023, the company had $1.64 trillion in total assets, of which $559.4 billion was from Credit Suisse.
However, UBS has been constantly facing legal hassles and operational challenges since its takeover of Credit Suisse. It has been facing challenges from individual shareholders and former employees of Credit Suisse. The company witnessed a class action suit by the former shareholders of Credit Suisse, who had suffered damages due to an inappropriate exchange ratio.
Also, UBS has resorted to job cuts post its acquisition to save costs. It aims to achieve gross cost reductions of more than $10 billion by the end of 2026 compared with the 2022 level. During the integration of Credit Suisse, the company expects more staff to leave on their own accord.
UBS Group AG’s shares have gained 40.5% on the NYSE over the past six months compared with the industry’s 9.9% rise.
Last week, Equity Bancshares, Inc. (EQBK - Free Report) , the holding company for Equity Bank, signed a definitive merger agreement to acquire Rockhold Bancorp, the parent company of the Bank of Kirksville in an all-cash merger transaction.
The closing of the deal, subject to regulatory approval and satisfaction of customary closing conditions, is expected in first-quarter 2024. Notably, Rockhold's sole shareholder has already approved the transaction.
EQBK expects the transaction to be 36 cents or 12% accretive to earnings per share (EPS) in 2024, and 45 cents or 14.3% accretive to EPS in 2025. It also anticipates the tangible book value earned back of nearly 1.3 years.
The all-stock merger deal between Banc of California, Inc. (BANC - Free Report) and PacWest Bancorp wrapped up last month. Per the terms of the agreement, PacWest merged into Banc of California, and Banc of California, N.A. merged into Pacific Western Bank.
The deal received shareholder approvals in late November. All necessary regulatory approvals for the merger (announced in July) were received in October.
The combined company is the third-largest bank based in California. Jared Wolff, CEO and president of BANC said, “By combining the best of two well-respected banks, we have created one of the nation’s premier, relationship-focused business banks. We look forward to sharing our expanded capabilities with clients and all the communities we serve.”
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UBS and Credit Suisse Agree to Merge Their Parent Banks
UBS Group AG (UBS - Free Report) and Credit Suisse Group AG’s board of directors have approved the merger between their parent banks namely UBS AG and Credit Suisse AG. This is a part of the integration process of Credit Suisse with UBS post their merger on Jun 12, 2023.
The merger agreement between the parent banks of the two holding companies is expected to be completed in 2024, subject to certain regulatory approvals.
Further, UBS continues to make arrangements for the planned merger of UBS Switzerland AG and Credit Suisse (Schweiz) AG, which is expected to take place in 2024.
This merger move would bring an end to the independent functioning of Credit Suisse AG and would include the client migration of its core business to UBS. Reuters reported that, per UBS Group AG's chairman and chief executive officer (CEO), “The integration would not be a straightforward process and that from an operational perspective, 2024 will be a decisive year.”
Also, the CEO stated last month that synergies from the emergency takeover of Credit Suisse in March 2023 are expected to be realized in 2025 and 2026.
The acquisition benefits UBS as it fortifies its position as a preeminent global wealth manager, with more than $3.6 billion in wealth management assets as of the third-quarter 2023 end. Also, the combined entity has invested assets of more than $1.5 trillion in the asset management segment. As of Sep 30, 2023, the company had $1.64 trillion in total assets, of which $559.4 billion was from Credit Suisse.
However, UBS has been constantly facing legal hassles and operational challenges since its takeover of Credit Suisse. It has been facing challenges from individual shareholders and former employees of Credit Suisse. The company witnessed a class action suit by the former shareholders of Credit Suisse, who had suffered damages due to an inappropriate exchange ratio.
Also, UBS has resorted to job cuts post its acquisition to save costs. It aims to achieve gross cost reductions of more than $10 billion by the end of 2026 compared with the 2022 level. During the integration of Credit Suisse, the company expects more staff to leave on their own accord.
UBS Group AG’s shares have gained 40.5% on the NYSE over the past six months compared with the industry’s 9.9% rise.
Image Source: Zacks Investment Research
UBS carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Banks
Last week, Equity Bancshares, Inc. (EQBK - Free Report) , the holding company for Equity Bank, signed a definitive merger agreement to acquire Rockhold Bancorp, the parent company of the Bank of Kirksville in an all-cash merger transaction.
The closing of the deal, subject to regulatory approval and satisfaction of customary closing conditions, is expected in first-quarter 2024. Notably, Rockhold's sole shareholder has already approved the transaction.
EQBK expects the transaction to be 36 cents or 12% accretive to earnings per share (EPS) in 2024, and 45 cents or 14.3% accretive to EPS in 2025. It also anticipates the tangible book value earned back of nearly 1.3 years.
The all-stock merger deal between Banc of California, Inc. (BANC - Free Report) and PacWest Bancorp wrapped up last month. Per the terms of the agreement, PacWest merged into Banc of California, and Banc of California, N.A. merged into Pacific Western Bank.
The deal received shareholder approvals in late November. All necessary regulatory approvals for the merger (announced in July) were received in October.
The combined company is the third-largest bank based in California. Jared Wolff, CEO and president of BANC said, “By combining the best of two well-respected banks, we have created one of the nation’s premier, relationship-focused business banks. We look forward to sharing our expanded capabilities with clients and all the communities we serve.”