Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
UBS has offered to pay back former Credit Suisse clients 90 per cent of the funds they invested with collapsed specialist finance firm Greensill Capital.
The offer is open until the end of July and UBS said it would take a provision of $900mn linked to it in the second quarter.
The Swiss lender is hoping to draw a line under one of the biggest and most damaging scandals that rocked Credit Suisse before it imploded last year. UBS acquired its former rival in a deal engineered by Swiss authorities.
Greensill’s fall trapped $10bn of assets in supply-chain finance funds run by Credit Suisse. The Swiss bank had persuaded 1,200 wealthy clients to invest in the funds, which were sold as low risk because they were underwritten by insurance contracts. But when insurers decided not to extend Greensill’s cover in 2021, the business went under.
“The offer aims to give fund investors certainty, an accelerated exit from their positions and a high level of financial recovery,” UBS said in a statement. “It will allow an early exit from fund investments compared to distributions under the ongoing recovery process.”
When Greensill collapsed spectacularly in 2021, it triggered a political scandal after it emerged that former prime minister Lord David Cameron, now foreign secretary, had lobbied ministers to allow Greensill wider access to state-backed emergency Covid-19 lending schemes while he was working as an adviser there.
The scandal was one of several that damaged Credit Suisse in the months before its rescue.
Greensill lent to a variety of businesses, including GFG, Sanjeev Gupta’s metals business; Bluestone Resources, a mining group owned by West Virginia governor Jim Justice; and Katerra, a construction company funded by SoftBank’s Vision Fund.
In April, UBS said recovery of the assets could last until at least 2031 and cost $321mn, up from a previous estimate of $291mn. It said the costs would be borne by the fund investors.
The offer would have no material impact on the bank’s financial results or capital requirements, UBS said.