UBS AG’s acquisition of Credit Suisse AG HK banking system resilient: CE

In view of the announcement of the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB) that Credit Suisse AG will be taken over by UBS AG, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have issued a joint press statement. Therein, both regulators state that they strongly welcome the acquisition and the SNB’s decision to provide the necessary liquidity for the purchase.
At the same time, the SFC and the HKMA note that the Honk Kong branch of Credit Suisse AG „only“ holds total assets worth about HK$100 billion which is comparatively small and represents „less than 0.5% of the total assets of the Hong Kong banking sector“. Furthermore, the regulators state that exposures of local banks to Credit Suisse are „insignificant“. In addition, the two licensed corporations of Credit Suisse in Hong Kong do not range „among the top 10 active brokers in the stock market and the derivatives market“.
To conclude, the HKMA states that the banking sector is well funded, liquid, and resilient, as may be seen by institutions‘ total capital adequacy ratio and the liquidity coverage ratio of category 1 institutions, which stood at 20.1% at the end of 2022 and 162.3% in the fourth quarter of 2022, respectively.
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Additionally, the Chief Executive, Mr. Lee, reaffirmed in a press statement the resilience of the Hong Kong financial market and reemphasized that „it is important for everybody to know that the adequacy and liquidity level of the Hong Kong financial and banking sectors are very healthy and abundant to be able to handle the pressure in the market“.