UBS set to carve up Credit Suisse after takeover day

ZURICH

UBS is set to finalise the takeover of Credit Suisse today, but the hardest part is yet to come: turning the arranged marriage of Switzerland's biggest banks into a success.

On June 5, the two Zurich-based banks announced that the merger should be completed on June 12.

A merger this complex could turn out to be a nightmare, particularly given how little time UBS has had.

UBS expects an exceptional accounting gain of nearly $35 billion due to the difference between the purchase price and the recognised net assets of Credit Suisse.

UBS chief executive Sergio Ermotti has warned the coming months will be "bumpy" for the bank.

He said jobs would be the trickiest part of the merger, adding that cuts were inevitable given the overlap in some activities. 

Like UBS, Credit Suisse was among 30 international banks deemed too big to fail due to their importance in the global banking architecture.

The collapse of three US regional lenders in March left Credit Suisse looking vulnerable.

The Swiss government, the central bank and financial regulators then stepped in and strongarmed UBS into a $3.25 billion takeover announced on March 19, before the markets reopened the following day.

The takeover terms and the size of the resulting megabank are causing serious concern in Switzerland.

The parliament in Bern has set up an extremely rare commission of inquiry, with lawmakers set to investigate how the emergency rescue was stitched together in double-quick time. 

Many questions surrounding the merger remain unanswered. Investors want to know more about the integration process and the bits of Credit Suisse that will be kept and absorbed.