UBS is considering taking over all or part of Credit Suisse, according to people familiar with the matter, and the boards of two of Switzerland’s biggest banks will meet separately over the weekend, making it the most important move in Europe since the financial crisis. We plan to consider consolidating other banks. Talk.
The Swiss National Bank and regulator Finma are coordinating negotiations to boost confidence in the country’s banking sector, the people said. Their intervention comes days after the central bank was forced to offer her a 50 billion franc ($54 billion) emergency line of credit to Credit Suisse.
But this hasn’t stopped the share price from falling, with the largest investor denying to provide any more capital, and after its chairman admitted the outflow of wealth management clients continued. It has fallen to a record low.
The stock performance of Swiss lenders has been very different in recent years. Over the past three years, UBS’s stock has risen about 120%, while the stock of its smaller rival has fallen about 70%. The former’s market cap is at his $56.6 billion, with Credit Suisse closing at his $8 billion on Friday.
In 2022, UBS made a profit of $7.6 billion, while Credit Suisse $7.9 billion losseffectively wiping out the entirety of the last decade’s earnings.
Swiss regulators told U.S. and U.K. officials on Friday evening that the merger was a “Plan A” to prevent a breakdown in investor confidence in Credit Suisse, one of the people said. I said yes.
A separate person said many options other than an outright acquisition are being discussed, adding that both sides are trying to assess regulatory constraints in different jurisdictions. It added that it is also analyzing the potential risks of trading.
The Swiss central bank hopes lenders can agree on a simple and straightforward solution before markets open on Monday, one of the people said. There can be no assurance that any transaction requiring approval by UBS stockholders will be completed.
Credit Suisse, UBS, the Swiss National Bank, the Federal Reserve and the Bank of England declined to comment.
The full merger will create one of Europe’s largest global systemically important financial institutions. UBS has total assets on its balance sheet of $1.1 trillion, while Credit Suisse has $575 billion.
However, such large trades can be tricky to execute. The Financial Times has previously said that other options under consideration include splitting Credit Suisse and selling its wealth management and wealth management divisions to UBS and other bidders, thereby splitting Credit Suisse and It reportedly included a public offering for the Swiss division to raise funds.
UBS is wary of emergency relief requests from the Swiss government after investors warned of Credit Suisse’s recent restructuring. Last year, CEO Ulrich Kellner cut 9,000 jobs and spun off much of the investment bank into a new organization called First He Boston, run by former director Michael Klein. announced plans to
A potential acquisition by its biggest rival is almost three years in the making. scandal and confusion At 167 years old Credit Suisse. The twin crises linked to specialist financial group Greensill Capital and family his office Archegos, both of which collapsed within weeks of his 2021, have resulted in billions of dollars in losses.
Lenders also fined for role in Mozambique’s $2 billion ‘tuna bond’ scandal after being found laundering money for Bulgarian cocaine cartels run by former experts , the first Swiss bank to be convicted of corporate crimes. wrestler.
Credit Suisse, on the other hand, is suffering from a major management turnover. Former CEO Tijan Thiam resigned in 2020 after a spying scandal and neighborhood dispute with his men that scandalized Zurich.
A year later, Antonio Orta Osorio assumed the presidency. The former Lloyds bank boss has been brought in to clean up Swiss lender culture. was evicted for violating Covid-19 quarantine rules to watch the men’s tennis final on the same day.
Additional reporting by Robert Smith
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