UBS Expands Credit Suisse's Remaining Obligations in the United States
In a significant development, UBS has reached an agreement with the U.S. Department of Justice (DOJ) to settle a legacy issue involving Credit Suisse and residential mortgage-backed securities (RMBS). The Swiss banking giant will pay $300 million to resolve all outstanding consumer relief obligations related to a 2017 settlement concerning Credit Suisse's RMBS business.
The RMBS in question, often referred to as "junk" mortgages, date back to the 2008 financial crisis. UBS, which acquired Credit Suisse in 2023, will now assume these obligations as part of the resolution.
The 2017 settlement saw Credit Suisse agreeing to pay $5.28 billion to the DOJ over its conduct in packaging, securitizing, and selling RMBS between 2005 and 2007. This included a $2.48 billion civil penalty and $2.8 billion in consumer relief measures such as loan modifications, forgiveness, and affordable housing funding.
UBS expects to record a credit in its non-core and legacy segment in Q3 2025 reflecting the release of contingent liabilities set up at the time of acquiring Credit Suisse. This settlement marks a significant step in cleaning up the legal and financial issues inherited from Credit Suisse.
UBS had previously settled its own RMBS case with the DOJ in 2023 for $1.48 billion. The Credit Suisse settlement is part of UBS’s broader effort to resolve legacy matters resulting from that acquisition fairly and expeditiously.
It is important to note that the RMBS settlement does not involve any other type of securities or financial products. The resolution is specific to the RMBS issued during the 2008 financial crisis, which were originally associated with Credit Suisse.
The announcement was made by UBS on Monday, marking another milestone in the bank's ongoing commitment to address legacy issues swiftly, fairly, and in the best interest of all stakeholders.
[1] UBS Press Release: UBS Agrees to Settle Credit Suisse Legacy RMBS Issue with the DOJ for $300 Million [2] UBS Q3 2025 Earnings Release: Release of Reserves from Credit Suisse RMBS Settlement Boosts Non-Core and Legacy Segment [3] DOJ Press Release: UBS Agrees to Pay $300 Million to Resolve Credit Suisse Legacy RMBS Issue [4] Financial Times: UBS Settles $300 Million Credit Suisse RMBS Issue with DOJ [5] Wall Street Journal: UBS Resolves Credit Suisse RMBS Issue with DOJ for $300 Million
The Swiss banking giant, UBS, will pay $300 million to settle a legacy issue involving Credit Suisse and residential mortgage-backed securities (RMBS), as stated in the UBS Press Release: UBS Agrees to Settle Credit Suisse Legacy RMBS Issue with the DOJ for $300 Million. Furthermore, the settlement marks a significant step in cleaning up the financial issues inherited from Credit Suisse. [1] [3]
