UBS Group to Make Trading Debut Next Week After Share Swap
Nov. 21 (Bloomberg) — UBS AG secured support from its investors to swap 90 percent of their shares into a new holding company under a plan to spare taxpayers another bailout of Switzerland’s biggest bank.
UBS Group AG is set to make its trading debut next week, consolidating supervision of subsidiaries at a non-operative level. Regulators say this will make it easier to wind them down and prevent a failure from disrupting the financial system.
UBS has said the creation of the holding company will probably reduce the amount of capital the bank has to hold under Swiss too-big-to-fail rules. The bank expects to return at least 25 Swiss centimes per share to stockholders of the new group.
Investors have been tendering their shares on a one-for-one basis since Oct. 14. At least two-thirds had to go along with the plan for it to be valid.
As of yesterday, the parent company represented all but about 10 percent of Zurich-based UBS based on a preliminary count, compared to 13.45 percent outstanding last week, the companies said in a joint statement today. UBS Group AG’s shares will begin trading in Zurich and New York on Nov. 28.
Swiss regulators are seeking to ensure financial stability and protect taxpayers. The government spent about $60 billion to prevent the bank, whose assets dwarf the Swiss economy, from collapsing during the 2008 financial crisis.
To further fence off risks, UBS plans to establish a banking subsidiary in Switzerland by mid-2015 that will house retail, corporate and the Swiss-booked wealth management business. It is reorganizing its unit in the U.K. to make it more self-sufficient and will have an intermediate holding company for all units in the U.S. by mid-2016. All businesses will remain within UBS AG, which in turn will be owned by UBS Group.
Credit Suisse Group AG, Switzerland’s second-biggest bank, said last year it also plans to isolate its Swiss operations in a separate unit to make it easier to salvage them in a crisis. The Zurich-based bank said it plans to implement changes to its structure starting in mid-2015. The company already has a group holding structure.
To contact the reporter on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Cindy Roberts
