Norway’s sovereign wealth fund has become the largest shareholder in Swiss bank UBS, which recently took over its smaller competitor Credit Suisse. NBIM increased its stake in UBS to more than five percent this month, the FT reported.
Strengthening its position
Norway’s sovereign wealth fund was already one of UBS’s ten largest shareholders. It has now surpassed US investors Dodge & Cox and BlackRock as the largest shareholder, according to S&P Capital IQ.
The Norwegian fund was also among Credit Suisse’s top ten investors at the time of its bankruptcy in March. A few weeks after the Credit Suisse bailout was negotiated, NBIM CEO Nicolai Tangen told Swiss newspaper Finews that the government’s rescue of Credit Suisse was the right move and prevented an out-of-control situation in the Swiss financial center and beyond.
Confirming the right strategy
UBS officials have spent the last six months trying to prove to investors that the state-organized bailout of former competitor Credit Suisse can be successful. Since the bailout was agreed six months ago, UBS shares have risen by more than 30 percent. Investors and analysts reacted positively to the bank’s announcement last month in which UBS said it would not seek state financial support for the deal.
UBS shares were also helped by the bank’s earnings results released at the end of August, which showed a record second-quarter net profit of $29 billion. This was due to an accounting gain from the Credit Suisse acquisition. Analysts expect that UBS will next year start its share buyback program, which it suspended after the Credit Suisse takeover deal.
Source Czech Press Office
