Despite an aid package worth billions, the major Swiss bank Credit Suisse is still under pressure. According to media reports, the major Swiss bank UBS could take over Credit Suisse. Apparently there are talks about this.
According to reports in the “Financial Times” and the news agency Reuters, the major Swiss bank UBS is said to be interested in taking over part or all of its ailing competitor Credit Suisse.
As the “Financial Times” reports, citing insiders, the supervisory boards of the two largest Swiss credit institutions want to meet separately at the weekend to hold appropriate consultations.
Reuters reported, citing “two people familiar with the situation”, that Swiss regulators were urging UBS to gobble up its smaller local rival. UBS had previously repeatedly spoken out against a takeover of Credit Suisse – most recently on Tuesday.
State guarantees as a prerequisite
The Swiss National Bank (SNB) and the Swiss financial regulator Finma have informed their international colleagues that they see a merger with UBS as the only way to stop the loss of confidence in Credit Suisse, the Financial Times also reported. The parties are working flat out to perhaps reach an agreement as early as Saturday night, the newspaper said.
According to the Financial Times, state guarantees are a prerequisite for a deal. Accordingly, the government in Bern should issue a guarantee to cover the risks associated with the takeover. A purchase of Credit Suisse by UBS would be the most important bank merger in Europe since the financial crisis.
Finma declined to comment, as did UBS and Credit Suisse.
Credit Suisse share price recently at record low
The lurching major bank Credit Suisse had recently suffered from a significant loss of investor confidence. The share price had fallen to a record low after the bank’s largest investor ruled out providing further capital and the institution continued to struggle with cash outflows. The SNB then provided the institute with loans of up to CHF 50 billion – the equivalent of almost EUR 51 billion.
It is the first time since the financial crisis of 2007 that a central bank has felt compelled to provide support for such a large bank. For the central bank, financial regulators and the government, it is now also a question of preventing a general banking crisis. A full merger would create one of the largest systemically important financial institutions in Europe.
According to media reports, takeover talks between UBS and Credit Suisse
Kathrin Hondl, ARD Geneva, March 18, 2023 9:15 p.m