2023-08-14 18:03:03
Zurich (awp) – UBS settled a new legal case. In connection with the rotten mortgage (subprime) affair in the United States, dating back fifteen years, the bank with the three keys has agreed to pay a sum of 1.435 billion dollars to the United States Department of Justice (DoJ) .
The agreement reached settles a legal case that dates back to 2006-2007 in relation to the issuance, underwriting and sale of mortgages called Residential Mortgage Backed Securities (RMBS, subprime), the big bank said Monday evening. It extinguishes at the same time all the civil claims of the DoJ in relation to this case.
The bank specifies that the amount it has agreed to pay is entirely covered by provisions made previously and that it therefore has no effect on the results.
During the presentation of the results in the 1st quarter, UBS had reported provisions of 665 million dollars for this affair. She said discussions with the DoJ were “very advanced”. Initially, UBS had considered taking the case to court.
Relic of the financial crisis
The subprime mortgage affair was at the origin of the 2008 financial crisis. Several large banks were accused of having deceived their customers by selling them rotten mortgages. When the real estate market collapsed, clients holding such securities lost large sums.
The UBS case was one of the last still pending. Several other major banks in the United States and Europe, including Credit Suisse, had settled the subprime mortgage case with agreements similar to the one announced by UBS on Monday, some a long time ago.
Credit Suisse settled the case in 2017 and then agreed to pay $2.48 billion.
Case in France and cases inherited from CS
With the subprime deal, UBS has settled one of its biggest slates. Another case remains open, the tax dispute with France. The bank with the three keys was ordered to pay a total of 1.8 billion euros in the context of this case at second instance. She resorted.
With the takeover of Credit Suisse, UBS inherits other cases in connection with the Greensill funds, a complaint from the Republic of Mozambique in the case of “tuna loans” and the complaint from the former Georgian Prime Minister Bidsina Iwanischwili. A few weeks ago, the Archegos case was settled and UBS agreed to pay some $400 million to the various parties involved.
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