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5d ago

UBS Agrees to $300 Million Settlement for Credit Suisse Mortgage Liabilities

It frees contingent reserves previously held for potential mortgage-backed securities losses.

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UBS Group and Credit Suisse logos are seen in this illustration taken March 18, 2023. REUTERS/Dado Ruvic/Illustration/File photo
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Ubs pays price for credit suisse rescue with $300m deal

Overview

  • The $300 million payment resolves all outstanding consumer relief obligations under Credit Suisse’s 2017 US RMBS settlement.
  • UBS acquired Credit Suisse in March 2023 and has since settled a range of legacy legal issues, including a $511 million tax-evasion settlement earlier this year.
  • The deal allows UBS to release contingent reserves in its non-core division, which is expected to boost its third-quarter results.
  • The original 2017 agreement required Credit Suisse to pay $5.7 billion over allegations it misrepresented residential mortgage-backed securities before the 2008 financial crisis.
  • Bloomberg Intelligence estimates the bank still faces about $500 million in further legacy exposures, notably from the 2021 Archegos Capital Management collapse.