UBS Group AG announced on Friday that it has ended its agreement with the Swiss government to cover losses incurred as a result of the bank’s takeover of rival Credit Suisse. This is a sign that the combined company is on track in a financial sense.
The decision to terminate the 9 billion franc ($10.3 billion) Loss Protection Agreement came after the Swiss government stress-tested a portfolio of Credit Suisse non-core assets. Shares in UBS rose by 4.35% following the announcement.
In terms of the agreement, UBS was set to receive the first 5 billion francs of losses before the state decided to increase this amount to 9 billion francs.
UBS is expected to provide further details on its integration plans on August 31 at the time of the release of its second-quarter earnings. “There will be many more milestones to come, and we will share some of these with you when we report our second-quarter results,” CEO Sergio Ermotti and Chairman Colm Kelleher stated in an internal memo.