FA critical weekend has dawned for the ailing major bank Credit Suisse. In a bid to get the bank, which is struggling with a massive loss of confidence, back on track, Swiss regulators are urging the other big federal money house UBS to gobble up all or part of its smaller rival, according to people familiar with the matter. UBS is therefore examining a takeover of the ailing Credit Suisse, subject to state guarantees – the government in Bern should issue a guarantee to cover the risks associated with the takeover, the two insiders said on Saturday. According to you, UBS is being pressured by the Swiss authorities to take over CS. Credit Suisse’s Swiss business could be spun off as part of the project, it said.
The merger of the two banks is the “Plan A” of the financial market authority Finma and the Swiss National Bank (SNB), also reported the “Financial Times”. After the trading day, the Credit Suisse share price rose by nine percent. UBS, CS and Swiss financial regulator Finma declined to comment when asked by Reuters. UBS and Credit Suisse declined to comment on the reports.
A purchase of Credit Suisse by UBS would be the most important bank merger in Europe since the financial crisis 15 years ago, for which the collapse of the American investment bank Lehman Brothers stands like no other event. Separate meetings of the boards of directors of the two companies have been scheduled for this weekend to discuss the issue, the Financial Times reported. Other options are also on the table. The aim of the SNB is for the parties to agree on a straightforward solution by the start of trading on Monday.
50 billion francs in aid from the SNB
A second report by the British financial newspaper said that the American fund company Blackrock was working on a bid to compete with Credit Suisse. A spokesman for the company said: “Blackrock is not involved in any plans to acquire all or part of Credit Suisse and has no interest in doing so.”
Credit Suisse found itself in (new) turbulence shortly after the US financial institutions Silicon Valley Bank (SVB) and Signature Bank collapsed. In the middle of the week, the 167-year-old Swiss bank had to draw on emergency loans from the Swiss National Bank with a volume of up to 50 billion francs. It is the first time since the financial crisis that a central bank has felt compelled to provide support for such a large bank.
This intervention temporarily calmed the situation, but was apparently not enough to break the downward spiral. Not only is the flight of private customers affecting Zürcher Bank, business with other financial institutions is also becoming increasingly difficult. At least four major firms, including Deutsche Bank and Societe Generale, have restricted their dealings with Credit Suisse or its securities, according to five people with direct knowledge of the matter.