Shares of Credit Suisse Group (NYSE:CS) and UBS Group AG (NYSE:UBS) closed Thursday’s session significantly lower, and new report released after the bell indicates the banks are now facing a U.S. Justice Department probe.
What To Know: Credit Suisse and UBS are among multiple banks facing scrutiny from the DOJ over potential involvement in helping Russian oligarchs evade sanctions, according to a Bloomberg report.
People familiar with the matter told Bloomberg the pair of Swiss banks were part of a recent group of subpoenas that came from the U.S. government. The subpoenas were reportedly sent out before the most recent financial struggles at Credit Suisse.
The Backdrop At Credit Suisse: Credit Suisse shares have faced heavy selling pressure over the last month. UBS agreed to acquire the embattled bank in an all-share transaction over the weekend.
The discussions were initiated and have the full support of the Swiss Federal Department of Finance, FINMA and the Swiss National Bank.
Under the terms, Credit Suisse shareholders will receive one share of UBS for every 22.48 Credit Suisse shares held.
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. We have structured a transaction which will preserve the value left in the business while limiting our downside exposure,” Colm Kelleher, chairman of UBS, said on Sunday.
See Also: Former Credit Suisse CEO John Mack Praises UBS Chair — Says Swiss Banks Should ‘Open Up The Vault’ More
CS, UBS Price Action: Credit Suisse shares closed Thursday down 4.92% at 87 cents, while UBS closed the trading session down more than 6% at $19.17. Both stocks were moving narrowly higher after hours, according to Benzinga Pro.
Photo: rjp from Flickr.
