In This Article:
(Updates with board vote, regulator comments)
By Noele Illien
BASEL, April 5 (Reuters) - UBS executives sought to assure investors on Wednesday that Switzerland's largest bank can make its unexpected takeover of Swiss rival Credit Suisse work and pay off for its shareholders.
While describing the biggest bank rescue since the global financial crisis as a milestone for the industry and a major challenge for the bank, Chairman Colm Kelleher told UBS shareholders it also meant "a new beginning and huge opportunities ahead for the combined bank and for the Swiss financial center as a whole."
Last month, Swiss authorities announced that UBS would buy Credit Suisse in a shotgun merger to stem further banking turmoil after the smaller lender had come to the brink of collapse.
After a run on deposits, the Swiss government had turned to UBS, which agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion), while the Alpine state put up more than 200 billion francs of support and guarantees.
Kelleher told the bank's shareholder meeting in Basel UBS was confident in its ability to successfully manage Credit Suisse's integration and that the combined bank would remain well capitalized.
"We believe the transaction is financially attractive for UBS shareholders," he said.
The hastily arranged rescue, not only angered and unsettled both banks' shareholders, but also many in Switzerland.
A survey by political research firm gfs.bern found a majority of Swiss did not support the deal that would create a financial institution with assets double the size of the country's annual economic output.
As shareholders expressed their frustration about being kept in the dark, with one calling it "an insult," some also voiced concerns about potential job losses and the new giant bank's adverse impact on competition.
Vice Chairman Lukas Gaehwiler sought to quell such fears saying there were around 250 banks in the country and therefore enough competition.
He also said it was too early to speculate about jobs before the "Herculean task" of the merger had completed, which he expected to happen within a few months.
On Sunday, Swiss daily Tages-Anzeiger cited an unnamed senior UBS manager as saying that the workforce of the combined group could shrink by 20-30%.
ALL OPTIONS ON TABLE
Gaehwiler also said that "all options are on the table" concerning Credit Suisse's domestic business, which would continue to operate under its old brand in Switzerland for the foreseeable future.