UBS Group AG Cancels Apollo-Credit Suisse Deal, Predicts $600 Million Q3 Loss for Credit Suisse

UBS Group AG has decided to terminate its agreement with Apollo Global Management and Credit Suisse concerning the management of specific securitized product group (SPG) assets. This announcement, made on Friday, predicts a loss of $600 million for Credit Suisse in the third quarter as a direct consequence.

This decision signifies an unsuccessful last attempt to stabilize the situation prior to UBS’s government-assisted rescue effort, which aims to rebuild investor confidence. The cancellation follows a significant initial agreement reached in February, during which assets and personnel, including Jay Kim, along with $20 billion in legacy assets, were transferred to Apollo’s Atlas.

Even with the termination of this agreement, Apollo Global Management will not benefit from managing the legacy assets. The initial arrangement for these securitized products was part of a broader strategy by UBS to refocus its efforts and restore trust among its investors. Nevertheless, this recent development suggests a shift in UBS’s strategy as it works through its recovery process.