UBS AG's acquisition of Credit Suisse AG
The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) welcomed the announcements made by the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB) early this morning (20 March) relating to the acquisition of Credit Suisse AG by UBS AG. SNB will provide liquidity assistance to support the acquisition.
Credit Suisse’s operations in Hong Kong comprise a branch supervised by the HKMA and two licensed corporations supervised by the SFC. All of them will open for business today as usual. Customers can continue to access their deposits with the branch and trading services provided by Credit Suisse for Hong Kong's stock and derivatives markets.
The total assets of Credit Suisse AG, Hong Kong Branch amounted to about HK$100 billion, representing less than 0.5% of the total assets of the Hong Kong banking sector. The exposures of the local banking sector to Credit Suisse are insignificant. The Hong Kong banking sector is resilient with strong capital and liquidity positions. The total capital adequacy ratio of locally incorporated authorized institutions stood at 20.1% at the end of 2022, well above the international minimum requirement of 8%. The average Liquidity Coverage Ratio of category 1 institutions was 162.3% in the fourth quarter of 2022, staying well above the statutory minimum requirement of 100%.
In addition, Credit Suisse’s licensed corporations are not among the top 10 active brokers in the stock market and the derivatives market. As of the end of February 2023, Credit Suisse was the 9th largest listed structured product issuer, accounting for about 4% of the total market in terms of market value of outstanding units. Their overall exposures to the Hong Kong market are not significant.
The SFC and the HKMA will stay in close touch with the Swiss authorities, and will monitor the financial markets very closely.
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