ZURICH (Reuters) – UBS expects to allocate about $900 million to Credit Suisse funds linked to collapsed supply chain finance firm Greensill Capital, the Swiss bank said on Monday.
UBS acquired Credit Suisse last year after its longtime rival collapsed amid a string of financial problems.
Among them, Credit Suisse suffered losses of 1.6 billion Swiss francs ($1.80 billion) due to the collapse of $10 billion of Greensill-linked supply chain finance funds in 2021.
At the center of the ill-fated scheme were supply chain finance deals, also known as reverse factoring, where companies can raise cash from banks and funds such as Greensill Capital to pay suppliers.
“Credit Suisse Supply Chain Finance Funds has made an offer to buy the fund units,” UBS said in a statement.
“Fund investors who choose to accept the offer will be redeemed at 90% of the net asset value determined on February 25, 2021, less any payments made to fund investors since then through the newly created feeder sub-funds.”
“UBS AG expects to record a provision of approximately $0.9 billion on a consolidated basis in connection with the offering in 2Q24.”
The proposal is not expected to have a material impact on CET1 UBS’s financial results or capital, the bank said.
“The proposal is intended to provide fund investors with certainty, accelerated exit from their positions and a high level of financial recovery,” UBS said.
($1 = 0.8905 Swiss franc)