'A signal for bankers', Uday Kotak on UBS takeover of Credit Suisse

Veteran banker and CEO of Kotak Mahindra Bank reacted to UBS' takeover of Credit Suisse. Underscoring the importane of risk-return assessment, he said that this development was a signal for all bankers and stakeholders not to become obsessed with "size".

"Credit Suisse sold to UBS for 3 bn $. 60%discount to stock value at Friday closing. ~600 bn $ balance sheet sold for 3 bn $ equity value. 17 bn $ of AT1 bonds written off. A signal for all bankers and stakeholders, when risk return matrix is overtaken by obsession with size", tweeted Kotak.

Banking giant UBS is buying troubled rival Credit Suisse for almost USD 3.25 billion, in a deal orchestrated by regulators in an effort to avoid further market-shaking turmoil in the global banking system.

Swiss authorities pushed for UBS to take over its smaller rival after a plan for Credit Suisse to borrow up to 50 billion francs (USD 54 billion) failed to reassure investors and the bank's customers.