Payments to US and UK authorities, at a total of $388 million, are to be made to draw a line under the Archegos affair of 2021. The failure of the US-based hedge fund, which was structured as a family office, damaged Credit Suisse's bottom line and added to other problems that engulfed that lender.

Credit Suisse – now UBS’s subsidiary – has agreed to pay $269 million to US authorities and $119 million to those in the UK to resolve matters linked to its relationship with the failed New York-based hedge fund/family office Archegos Capital Management. 

The bank has inked a resolution with the US Federal Reserve System and the UK Prudential Regulation Authority. It also said that Swiss Financial Market Supervisory Authority proceedings related to Credit Suisse’s relationship with Archegos have been concluded.

Losses that Credit Suisse sustained by exposure to Archegos in 2021 – other banks were also hit, but not as severely – were among a number of mishaps that hurt the Swiss lender, eventually leading to a slide in its share price. UBS, at the behest of the Swiss federal government, agreed to buy Switzerland’s second-largest bank in the spring. As a result, UBS is working through a backlog of legal and regulatory issues at Credit Suisse.

Following the settlements, Credit Suisse will record an additional provision in its second quarter 2023 financial statements to reflect these resolutions. UBS Group AG will reflect the provision in purchase accounting for the acquisition of Credit Suisse, which was completed on 12 June 2023, UBS said in a statement yesterday.

The Federal Reserve and FINMA have imposed remedial requirements relating to credit, liquidity and non-financial risk management, as well as oversight of remedial efforts.

UBS will implement its operational and risk management discipline and its culture across the combined organisation, UBS said.