UBS, Switzerland’s largest bank, has agreed to buy rival Credit Suisse for greater than $2 billion in a fallback deal to avoid the turmoil of the present banking crisis.
The Swiss National Bank announced the deal on Sunday, saying it will “secure financial stability and protect the Swiss economy” following a worldwide market panic following the collapse of US Silicon Valley Bank and Signature Bank.
Credit Suisse shares fell 25% last week, sparking a banking frenzy amongst customers that led to withdrawals of $10 billion a day, the Financial Times reported.
To stop a complete meltdown on Monday, Swiss officials agreed to speed up the takeover of UBS by offering Credit Suisse a $100 billion liquidity line as a part of the deal.
The deal comes only a day after a gathering between UBS and the Swiss National Bank, where the corporate initially offered $1 billion for the takeover. Now UBS can pay about 54 cents a share of its own shares to secure the deal.
UBS and Credit Suisse are among the many 30 largest banks on the planet with combined assets of roughly $1.7 trillion and are headquartered in Zurich.
Credit Suisse was the one which was higher off 15 years ago throughout the 2008 financial crisis, and UBS was the bank that needed government help on the time.
But Credit Suisse shares have fallen 84% within the last two years, and as an alternative UBS shares are up 15%.
Because the second largest bank in Switzerland, Credit Suisse employed over 50,000 people at the tip of 2022.
The bank saw its share price fall 30% Wednesday night after market fears over the collapse of SVB and Signature Bank, with the Swiss National Bank offering a $54 billion lifebuoy that was unable to save the bank.
With the merger of Swiss banking giants, S&P Global Inc. downgrades First Republic Bank again, lower than every week after downgrading its initial rating.
Sources said Bloomberg The rating company will announce a downgrade from BB+ to B+ only this week, just days after downgrading it from A-, due to the consequences of the present banking crisis.
“Following Thursday’s uninsured deposit of $30 billion by 11 of the nation’s largest banks, together with money readily available, First Republic Bank is well positioned to manage its short-term deposit business,” the bank said in a press release. “This support reflects confidence within the First Republic and its ability to proceed to deliver unwavering, exceptional services to its clients and communities.”
The S&P didn’t respond to The Post’s request for comment on Sunday.