SHANGHAI/HONG KONG, Sept 19 (Reuters) – UBS has recognized not less than 4 international locations, together with South Korea and India, as being “gradual” to grant the regulatory approvals wanted to finish its takeover of Credit score Suisse, an inner doc reviewed by Reuters exhibits.
The Swiss banking big has additionally highlighted Eire and Saudi Arabia as “gradual jurisdictions” in granting licences, in accordance with the beforehand unreported doc which was dated Sept. 6 and was circulated to UBS (UBSG.S) employees globally.
Ready by UBS after a worldwide assessment to evaluate the timeline of regulatory approvals mandatory for the mixing of Credit score Suisse to finish, the doc mentioned uncooperative regulators might put transactions such because the Swiss financial institution deal in danger.
The doc says that “a single non-cooperative regulator can jeopardize the timeline of the guardian financial institution merger and different transactions”, impacting different associated integration offers.
The uncertainties might result in winding down companies and asset gross sales, when UBS faces “tough jurisdictions or regulators”, the Swiss financial institution mentioned within the doc.
Credit score Suisse, which was Switzerland’s second-biggest financial institution, suffered years of scandals and losses earlier than it needed to be rescued in March in a state-engineered takeover by UBS.
Though UBS accomplished the takeover in June, it nonetheless wants approvals from regulators in markets the place each the banks function for the authorized completion of the primary rescue of a worldwide financial institution for the reason that 2008 monetary disaster.
Credit score Suisse declined to remark. UBS didn’t reply to a request for remark. Spokespeople for central banks in South Korea, India, Eire, and Saudi Arabia additionally didn’t instantly reply to Reuters requests for remark.
It’s regular for big merger and acquisition offers to be delayed by the myriad regulatory approvals wanted to shut a deal, and in only a few instances transactions do get derailed attributable to objections raised by some regulators.
The primary-ever merger of two world systemically necessary banks has created each alternatives and dangers for UBS, which has been engaged on integrating Credit score Suisse’s companies.
Final month UBS mentioned it anticipated the takeover to be accomplished in 2024. The financial institution’s inner doc confirmed the method could possibly be completed as quickly as Might subsequent yr.
‘CHANGE IN CONTROL’
In South Korea, it might take as much as 18 to 22 months to acquire new licences, whereas in Eire the method might take as much as two years, and in Saudi Arabia as much as 12 months, the doc mentioned.
The regulator in India might take a minimal of six months to approve the establishing of a brand new department, it added.
UBS additionally mentioned within the doc that for Russia, a “change in management” approval might by no means be obtained as this could possibly be a politically pushed determination.
In a Might disclosure filed with the U.S. securities regulator, UBS mentioned that its exposure to Russia contributed $98 million to its complete rising market publicity of $18.6 billion as of Dec. 31, 2022.
Final month, a Moscow courtroom banned UBS and Credit score Suisse from disposing of shares of their Russian subsidiaries, Reuters reported, citing courtroom paperwork.
Legal guidelines launched after Russia despatched troops to Ukraine in February final yr have made presidential approval mandatory for banks to chop ties with their native enterprise, whereas a authorities fee critiques all asset transfers involving Western corporations.
Russia’s central financial institution and finance ministry didn’t instantly reply to requests for remark.
Nearly all of markets UBS and Credit score Suisse function in grant computerized switch of all property and liabilities, which they time period common succession, whereas seven of 51 jurisdictions don’t recognise the follow, the doc confirmed.
These seven markets are Bahrain, Dubai, Abu Dhabi, Japan, Saudi Arabia, Thailand, Turkey, mentioned the doc, including that “particular person transfers are very burdensome, time-intensive and entail the danger of lacking consents” in these jurisdictions.
Reporting by Engen Tham in Shanghai and Selena Li in Hong Kong; Further reporting by Jihoon Lee in South Korea and Alexander Marrow in London; Modifying by Sumeet Chatterjee, Stephen Coates and Alexander Smith
Our Requirements: The Thomson Reuters Trust Principles.