The expectation regarding the possible purchase of Credit Suisse by its main Swiss rival, the UBS bank, was definitively confirmed today, although it is not what was expected by analysts. UBS has offered a low offer of 1,000 million dollars (930 million euros) to save its main competitor from bankruptcy, according to the economic newspaper Financial Times, with which it would pay a price of 0.25 Swiss francs per share, 83% below the 1.86 francs with which it closed its market capitalization last Friday. It is a first approximation encouraged by the Swiss authorities, who want to close the operation immediately, but the reluctance of UBS, which has doubts about the legal basis of the operation, for which it wants to ensure that it will be exempt from possible claims and regulatory interventions. .
A former head of financial regulator Finma, quoted by Swiss television RTS, has said that a merger between UBS and Credit Suisse would not be possible under national competition rules, given their dominant position in the Swiss banking sector. For this reason, and according to financial sources, UBS is studying in detail all the repercussions of the operation, including the mandatory consultation with shareholders, within a period of no more than six weeks, so that they give their approval to the acquisition. A procedure that would delay the process, something that Credit Suisse cannot afford.
For this reason, the purchasing entity has asked the Swiss government for guarantees that a partial or complete acquisition of its rival will not cause legal problems or losses. This information shuffles the possibility that UBS assumes the activities of management of fortunes and assets of its rival, while it would sell the business banking. The Swiss economic agency AWP affirmed that both the Swiss National Bank (SNB) and the regulatory commission of the stock market (Finma) openly admit that the purchase of Credit Suisse by UBS is the only solution to avoid the collapse of the bank of the two candles.
Wrapped in serious financial and image problems, the Credit Suisse bank suffered a 24% drop on the Zurich stock market last Wednesday, after its main shareholder since 2022, the Saudi National Bank, assured that it was not going to invest more in the Swiss entity to clean up its battered accounts. To calm the market, the Swiss National Bank announced hours after that stock market crash a loan of 50,000 million francs (50,500 million euros, 54,000 dollars) to Credit Suisse, which allowed the entity to recover 19% on the stock market. of Zurich on Thursday, but on Friday shareholder doubts returned and shares fell again 8%.
What is completely ruled out is the option for the entity to end up in the hands of the US investment fund BlackRock, which owns 4% of the Swiss bank’s shares and has denied such a possibility. The largest investment fund in the world denied that it was preparing its acquisition. “BlackRock is not participating in any plan to acquire all or part of Credit Suisse and has no interest in doing so,” a spokesman for the New York-based firm confirmed.
Credit Suisse, founded in 1856, has chained two years of millionaire losses: in 2021 they were 1,572 million Swiss francs (1,600 million euros, 1,690 million dollars), and in 2022 they almost quintupled, to 7,293 million francs (7,400 million euros, 7,800 million dollars). Among the main factors behind these dismal accounts and investor mistrust is its exposure to risk firms that collapsed in previous years, such as the US hedge fund Archegos or the Anglo-Australian financial services firm Greensill. Added to the financial problems are many others related to the bank’s reputation, with various resignations of its directors immersed in various scandals, which have caused extensive reshuffling of the board of directors in recent years.