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UBS has been hit with $400mn of real estate costs tied to its takeover of Credit Suisse, including breaking leases on offices occupied by its defunct rival.
UBS has begun transferring thousands of Credit Suisse staff to its own buildings and removing the fallen bank’s logos from its UK headquarters in Canary Wharf and New York head office in Madison Avenue.
The Swiss lender has taken a $200mn expense on the Credit Suisse leases for 2022 and another for 2023, according to a filing to US Securities and Exchange Commission published on Friday. A person with knowledge of the costs said they were not only tied to terminating contracts early, but also for refurbishing offices.
UBS’s takeover of Credit Suisse — which was agreed in March, but completed in June — is the most significant bank merger since the global financial crisis. So far, 13,000 jobs have already been cut from the combined group, though thousands more are expected to go in the coming years.
Sergio Ermotti, UBS’s chief executive, recently said he expected 2024 to be the hardest and most costly year in the integration, which is projected to take three years.
Last month, the bank reported its first quarterly loss in almost six years as it was hit with $2.2bn of expenses tied to the deal.
UBS began removing Credit Suisse’s brand in New York in August, replacing signs at the collapsed bank’s US headquarters.
A month later, UBS informed staff in Credit Suisse’s London office at One Cabot Square that employees would begin to proceed into UBS’s main office near Liverpool Street and that all transfers would be completed by the end of 2024.
In order to make room for the incoming Credit Suisse staff at 5 Broadgate, UBS broke an agreement it had with Grant Thornton to sublet two floors to the accounting firm.
Credit Suisse sold One Cabot Square to the Qatar Investment Authority in 2012 but took a long-term lease on it to 2034. The building underwent an expensive revamp in 2019 just before Covid-19 hit, with executive floors spruced up.
Credit Suisse was one of the first major tenants of the Canary Wharf estate. The Docklands financial district was the brainchild of Michael von Clemm, chair of Credit Suisse First Boston.
One Cabot Square has been Credit Suisse’s UK headquarters since 1991, but in recent years the Swiss lender has reduced its footprint in the building as staff numbers have dropped. At the time of the takeover, it occupied nine out of the building’s 21 floors.
In October, UBS removed the large Credit Suisse logo from the top of One Cabot Square.
