UBS offers to repay 90% to clients hit by Greensill implosion

“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. Keystone / Georgios Kefalas

UBS has offered to pay back former Credit Suisse clients 90% of the funds they invested with collapsed specialist finance firm Greensill Capital.

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The offer is open until the end of July and UBS said it would take a provision of $900 million (CHF800 million) 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 $10 billion 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.

+ Swiss finance entangled in Greensill debacle

“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.”

Political scandal

When Greensill collapsed spectacularly in 2021, it triggered a political scandal after it emerged that former prime minister 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.

+ Where did it all go wrong for Credit Suisse?

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 $321 million, up from a previous estimate of $291 million. 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.

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