06/17/2024 – 11:09
Swiss bank UBS is trying to put an end to one of the serious scandals that helped bring down Credit Suisse, offering to repay a significant portion of the $2.5 billion still held in investment funds linked to defunct credit provider Greensill Capital.
UBS said one of its units will make a $900 million provision in its second-quarter balance sheet to help repay investors 90% of their remaining holdings in the fund, but stressed the payments will not affect the group’s results or capital. because they have already suffered a write-down.
Credit Suisse and Greensill operated $10 billion worth of investment funds backed by supply chain finance before Greensill went bankrupt in March 2021. Later that month, a major Credit Suisse client, Archegos Capital Management defaulted on US$5.5 billion in positions, causing the bank to face a serious financial crisis for two years.
UBS rescued Credit Suisse last year, in a deal that included the participation of the Swiss government.
Credit Suisse has already returned more than $7 billion in Greensill funds to investors. Greensill went bankrupt when it was unable to renew its loan insurance, exposing the low quality of much of its credit.
UBS said the payment offer is intended to give investors security and ensure they can exit investments quickly. Source: Dow Jones Newswires.
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