UBS reaches settlement in Greensill litigation with insurer IAG

Dusseldorf. Credit Suisse, which was taken over by UBS, is completing another legacy in the process of dealing with the Greensill debacle. It has now agreed to a settlement in a billion-dollar lawsuit against the Australian insurer IAG. The terms of the agreement are confidential, according to a statement from IAG on Friday.

The agreement on the legacy issue comes just shortly before the start of proceedings in an Australian court scheduled for next week. Various media had already reported on intensive discussions last week.

UBS welcomed the agreement in a statement on Friday: The settlement of the CS supply chain funds with the defendant insurer is in line with the bank's goal of clarifying legacy issues "quickly and in the best interests of its stakeholders." The bank also did not want to comment on the details of the agreement.

However, the agreement could have a financial impact for the major bank: the settlement of the matter will probably be part of UBS's reporting for the third quarter, a person familiar with the matter confirmed to AWP.

The Greensill case, which placed a heavy burden on Credit Suisse in the last years of its existence, involved the pre-financing of outstanding corporate claims. Australian financier Lex Greensill's Greensill Capital had pooled such receivables purchased at a discount and incorporated them into the Credit Suisse supply chain funds. In 2021, as a result of the collapse of Greensill Capital, CS decided to discontinue funds with assets of around $10 billion.

The lawsuit, which has now been settled by UBS, concerned insurance coverage of the claims by the former IAG subsidiary BCC Trade Credit, which the CS companies also claimed. IAG rejected the claims. She justified this, among other things, by saying that she had already sold BCC at the time.

For IAG itself, the agreement with Credit Suisse will have no material impact on the financial statements, the insurer wrote in its statement. IAG had already reached an agreement with a number of plaintiffs in the proceedings in the spring. However, further proceedings with the investment company White Oak remain pending.