Swiss banking giant UBS 'in talks to takeover troubled rival Credit Suisse'

19 March 2023, 16:45

Swiss banking giant UBS is reportedly in advanced talks to buy all or part of crisis-hit lender Credit Suisse.
Swiss banking giant UBS is reportedly in advanced talks to buy all or part of crisis-hit lender Credit Suisse. Picture: Getty

By Chris Samuel

Swiss banking giant UBS is reportedly in advanced talks to buy all or part of crisis-hit lender Credit Suisse.

Credit Suisse, the country's second largest bank, is facing a crisis of confidence and its shares lost a quarter of their value in the last week.

UBS is offering to pay up to $1bn (£820m) for the troubled lender, though Credit Suisse was unhappy with the deeply discounted offer, The Financial Times reports

Swiss authorities are reportedly planning to change the country's laws in order to bypass a vote on the transaction by UBS shareholders, who would normally have six weeks to consider a deal of this scale, to speed through a deal before markets reopen on Monday.

The crisis at Credit Suisse, one of 30 global systemically important banks has led to concerns about the health of the global financial system.

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But the bank, among a small group of financial companies that have been deemed too big to fail, is loss-making and in recent years has been hit with a string of problems.

This week Credit Suisse received a loan from Swiss National Bank of up to £44.5bn to backstop it, but the move failed to reassure markets and its shares tumbled 24 percent, sparking a wider sell-off on European markets.

UBS is reportedly offering to pay up to $1bn (£820m) for the troubled lender, though Credit Suisse was said to be unhappy with the deeply discounted offer.
UBS is reportedly offering to pay up to $1bn (£820m) for the troubled lender, though Credit Suisse was said to be unhappy with the deeply discounted offer. Picture: Getty
A sign of Credit Suisse is seen behind a clock at the headquarters of Switzerland's second-biggest bank in Zurich on March 18, 2023
A sign of Credit Suisse is seen behind a clock at the headquarters of Switzerland's second-biggest bank in Zurich on March 18, 2023. Picture: Getty

According to the FT, the all-share deal could be signed as soon as Sunday evening.

The deal currently believed to be on the table would value Credit Suisse at around £7billion dollars less than its value at market close on Friday.

However, the outlet said that terms could change and a deal hadn't yet been reached.

The UK Treasury is also reportedly monitoring the situation, and officials at the Bank of England have confirmed they are in close contact with their counterparts at the Swiss National Bank while management and regulators discuss Credit Suisse's future.

UBS is said to have asked the Swiss government for around $6bn to cover costs if it were to buy the bank, sources quoted by Reuters said.

Any deal may also bring significant job losses.

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