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UBS aims to avoid using $10 billion Credit Suisse backstop amid backlash -FT

Published 07/03/2023, 12:50 AM
Updated 07/03/2023, 04:30 AM
© Reuters. FILE PHOTO: Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland, March 20, 2023. REUTERS/Denis Balibouse/File Photo
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(Reuters) -UBS Group AG is aiming to avoid using a $10 billion backstop for Credit Suisse amid a backlash, the Financial Times reported on Sunday.

UBS executives are hoping to announce that the bank will not call on the government backstop when it publishes its second-quarter results on Aug. 31, the report added.

UBS declined to comment while Credit Suisse did not immediately respond to Reuters' request for comment.

In June, UBS reached an agreement with the Swiss government under which the government will guarantee up to 9 billion Swiss francs ($9.98 billion) of losses UBS may incur from the sale of its rival's assets beyond 5 billion francs the lender is due to cover itself.

The government's and UBS' priority was to "minimise potential losses and risks so that recourse to the federal guarantee is avoided to the greatest extent possible," the government said.

© Reuters. FILE PHOTO: Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland, March 20, 2023. REUTERS/Denis Balibouse/File Photo

Valuations of the losses are expected to be made available during the third quarter of 2023, the government said.

Chief Executive Sergio Ermotti has said UBS' leadership would do everything possible to prevent Swiss taxpayers from bearing the costs of the take over.

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