- Swiss prosecutors have launched a probe into the UBS takeover of rival Credit Suisse.
- Switzerland’s Federal Prosecutor is looking into possible breaches of criminal law.
- The takeover has proved highly unpopular in Switzerland, with a majority wanting UBS split up.
Swiss prosecutors have launched a probe into the takeover of Credit Suisse by its arch rival UBS as scrutiny of the highly controversial acquisition intensified, according to a report.
Switzerland’s Federal Prosecutor told the Financial Times it was looking into potential breaches of Swiss criminal law by government officials, regulators and executives at the banks.
UBS bought Credit Suisse for $3.25 billion last month in an emergency rescue deal brokered by regulators following a loss of confidence in the lender that began when its biggest investor, the Saudi National Bank, said it wouldn’t put more funds in.
“The Federal Prosecutor’s office wants to proactively fulfil its mission and responsibility to contribute to a clean Swiss financial centre and has set up monitoring in order to take immediate action in any situation that falls within its field of activity,” the authority told the FT.
The group said there were “numerous aspects of events around Credit Suisse” that required investigation to “identify any crimes.”
Combining the two banks has created a huge institution with a balance sheet of $5.5 trillion, or about twice the entire Swiss economy.
That has caused political unrest in Switzerland, which is now heavily exposed to a financial institution that hasn’t yet convinced markets that its Credit Suisse arm is now secure.
More than half of Swiss voters oppose the takeover, according to a GFS poll reported by Bloomberg. More were in favor of a temporary takeover of the troubled Credit Suisse, while a majority now prefer the bank to be broken up, per the FT.
The Swiss parliament released a statement last week announcing special joint sessions to investigate the takeover.
“The main question is whether the actions of the federal authorities were lawful, appropriate and effective,” the group said.
The bank is reportedly planning to lay off up to 30% of its workforce following its takeover of Credit Suisse that would equal tens of thousands of job losses, SonntagsZeitung first reported.
Credit Suisse and UBS are both due to hold annual meetings for shareholders this week.