UBS to book $900 million provision linked to inherited Greensill funds

UBS announced on Monday that it is expecting to set aside approximately $900 million as a provision for Credit Suisse’s funds connected to the failed supply chain financing company, Greensill Capital. Last year, UBS acquired Credit Suisse after it faced a series of financial difficulties. One of these issues was a loss of 1.6 billion Swiss francs ($1.80 billion) resulting from the collapse of $10 billion worth of supply chain finance funds linked to Greensill in 2021. The failed scheme involved supply chain finance deals, also known as reverse factoring, where companies can obtain cash from banks and funds like Greensill Capital in order to pay suppliers. UBS stated that the Credit Suisse Supply Chain Finance Funds have made an offer to redeem fund units.
Investors who choose to accept the offer will be redeemed at 90% of the Net Asset Value determined on February 25, 2021, after deducting any payments made to investors since then, through newly established feeder subfunds.

UBS AG anticipates recording a provision of approximately $0.9 billion on a consolidated basis in relation to the offer in the second quarter of 2024.

UBS stated that the offer is not expected to have a significant impact on its financial results or CET1 capital.

UBS explained that the purpose of the offer is to provide fund investors with certainty, a quicker exit from their positions, and a high level of financial recovery.

(Conversion rate: $1 = 0.8905 Swiss francs)