According to multiple reports, Swiss bank UBS Group is closing in on a deal to acquire its rival Credit Suisse amid a weekend of frantic negotiations.
The Swiss government and other global authorities, including some within the US, are working to reach a deal on Sunday in hopes of bolstering confidence within the banking system before markets open on Monday.
The fight to close the deal continues after the Swiss National Bank and the country’s chief regulator, Finma, told their international counterparts they saw a deal with UBS because the only option to stave off Credit Suisse’s collapse. The Financial Times reported..
This will probably be the primary merger of two global systemically necessary banks because the financial crisis of 2008-2009, according to Bloomberg news.
A full merger would create one among the biggest financial institutions in Europe.
Switzerland is preparing to take emergency measures to speed up a deal, the FT reported.
NRAs have proposed a departure from rules that normally require six weeks’ notice and a shareholder vote on a takeover so the sale can occur quickly.
Credit Suisse, 167, received greater than $50 billion from the Swiss National Bank this week as concerns were raised about its solvency after the shock to the banking system brought on by the collapse of California’s Silicon Valley bank.
![Credit Suisse sign](https://nypost.com/wp-content/uploads/sites/2/2023/03/GettyImages-1248450281.jpg?w=1024)
But that infusion didn’t stop investors from selling off the bank’s shares or slowing down depositors, who were pulling their money out of their accounts at a rate of $10.8 billion a day, the FT reports.
The continuing panic has forced the Swiss National Bank and the national financial watchdog to hold weekend talks over a possible takeover by UBS, which with $1.1 trillion in assets is about twice the scale of Credit Suisse, reports the Wall Street Journal.
UBS is asking the Swiss government to cover around $6 billion in costs related to a possible takeover, reported Reuters. This is able to cover each liquidation expenses for a few of the failing bank’s operations and legal bills.
It continues to be not known how precisely the sale will probably be carried out. It is feasible that UBS will take over all of Credit Suisse, however the fate of its huge retail bank is reportedly one thing, and that of its struggling investment bank is one other.
UBS, which posted a profit of $7.6 billion in 2022, is probably going to acquire Credit Suisse’s wealth management business, which is able to come from high-priced clients in Asia and the Middle East.
Credit Suisse reported a lack of $7.9 billion last yr.
At the tip of 2022, Credit Suisse had roughly 50,000 employees, including greater than 16,000 in Switzerland.
Its global operations include an investment banking unit in Recent York and an operations center near Raleigh, North Carolina.
UBS has roughly 74,000 employees worldwide.
Up to 10,000 jobs may very well be cut if the 2 banks merged, nevertheless it was unclear which bank departments could be affected by any cuts.
Credit Suisse announced a plan to cut 9,000 jobs last yr because it struggled to reorganize.
It’s still possible the deal could fall through, and other financial players are reportedly in the combo as well, the Journal reported.
With postal wires