UBS Agrees to Pay $300 Million for Settlement over Credit Suisse Mortgage Securities Dispute
In a significant financial move, Swiss banking giant UBS has agreed to pay a total of $500 million to settle various legacy issues related to Credit Suisse. This includes the aftermath of the Archegos collapse and other outstanding matters.
The settlement, announced recently, is in addition to the $300 million UBS agreed to pay in 2025 to settle Credit Suisse’s remaining consumer relief commitments related to residential mortgage-backed securities (RMBS), as part of a 2017 agreement with the U.S. Justice Department.
The Archegos collapse, which took place in March 2021, cost Credit Suisse roughly $5.5 billion. The Federal Reserve fined UBS $268.5 million over unsafe and unsound counterparty credit risk management practices between Credit Suisse and Archegos in July. UBS settled its own RMBS case with the DOJ for nearly $1.4 billion in August 2023.
In 2023, UBS completed a $3.25 billion government-orchestrated deal to buy Credit Suisse. Since then, UBS has been dealing with various legacy issues from the acquisition.
In January 2017, Credit Suisse agreed to pay $5.28 billion for its conduct over the sale of residential mortgage-backed securities between 2005 and 2007. The bank pleaded guilty to conspiring to hide more than $4 billion from the Internal Revenue Service in at least 475 offshore accounts, according to the DOJ.
UBS also settled a decades-long probe for roughly $511 million in May into how Credit Suisse helped taxpayers hide assets and income in offshore accounts for over a decade.
In a positive development, UBS expects to record a credit in its non-core and legacy segment in the third quarter of 2025 from the release of a contingent liability that was established during the Credit Suisse acquisition process.
UBS's agreement with the DOJ will resolve all of Credit Suisse's remaining consumer relief obligations from the 2017 settlement. The bank also reached a settlement with Mozambique in the 2013 "tuna bonds" scandal in October 2023. The financial details of the deal were not disclosed, but a source familiar with the matter told Reuters that UBS would forgive less than $100 million of a loan Credit Suisse made to Mozambique in 2013.
These settlements mark a significant step for UBS in moving past the legacy issues inherited from Credit Suisse. The bank continues to navigate the complexities of the financial industry, striving to maintain its position as a global leader in banking.
The settlement of $500 million by UBS, announced recently, involves business matters with Credit Suisse, encompassing the aftermath of the Archegos collapse and other pending issues. Additionally, UBS is expected to record a credit in its finance segment in the third quarter of 2025, marking a resolution of some of the legacy issues from the Credit Suisse acquisition.
