By Adria Calatayud


UBS Group shares climbed Friday to a level last seen before the collapse of Silicon Valley Bank in March after news that it ended an agreement with the Swiss government to cover potential losses from its acquisition of Credit Suisse.

At 0738 GMT, shares in UBS jumped 4.2% to CHF20.22, having earlier risen to CHF20.54. This puts it above the CHF20.19 level the stock closed at on March 8, just before troubles at SVB emerged and engulfed the financial sector on both sides of the Atlantic in an intense--but brief--crisis of confidence that led to UBS's takeover of Credit Suisse.

The Swiss banking giant said a 9 billion Swiss franc ($10.27 billion) loss-protection agreement with the Swiss government and a CHF100 billion public-liquidity backstop from the central bank--with the backing of the government--that were put in place ahead of the completion of the Credit Suisse deal in June have been voluntarily ended.

The measures allowed UBS to clear the final hurdle for a deal forced on it by Swiss authorities after its smaller rival lost the confidence of clients and investors.

The termination follows an assessment of Credit Suisse's noncore assets that were covered by the agreement and the funding situation at Credit Suisse entities and the group overall, UBS said. UBS said it concluded the aid was no longer required.

This will allow UBS to save on future fees, Citi analysts said in a note to clients.

"More important is the reassurance this provides on the health of the Credit Suisse noncore portfolio," the Citi analysts said.

Credit Suisse also repaid as of Thursday an emergency liquidity assistance loan of CHF50 billion to the Swiss National Bank, UBS said. The SNB offered the lifeline to Credit Suisse at the height of the banking crisis in March, at a time when investor confidence was deteriorating rapidly before its takeover by UBS.


Write to Adria Calatayud at adria.calatayud@dowjones.com


(END) Dow Jones Newswires

08-11-23 0409ET