UBS AG is considering a takeover of its battered Swiss competitor Credit Suisse on Saturday, sources said, a move that could allay fears an ongoing crisis could destabilize the global banking system.
Credit Suisse, 167, is the biggest name caught in the market turmoil triggered by the collapse of US banks Silicon Valley Bank and Signature Bank last week, during which the Swiss bank lost a quarter of its value.
To control the crisis, UBS is under pressure from Swiss authorities to make a takeover of its local rival, two people familiar with the matter said. The plan could see the Swiss government provide a guarantee against related risks, while Credit Suisse’s Swiss operations could be spun off.
UBS, Credit Suisse and Swiss financial regulator Finma declined to comment.
The Financial Times quoted people familiar with the matter as saying UBS, Credit Suisse and regulators were racing to finalize a merger deal as early as Saturday night.
Credit Suisse chief financial officer Dixit Joshi and his teams met over the weekend to weigh their options for the bank, people familiar with the matter told Reuters, and there were several reports of interest from competitors.
US financial giant BlackRock said it has no plans or interests in a rival bid for Credit Suisse, while Bloomberg reported that Deutsche Bank is looking into buying some of the bank’s assets.
Credit Suisse’s share price fluctuated widely during the week, and the bank was forced to draw on $54 billion in central bank funding.
The mood in Switzerland, long considered an icon of banking stability, was one of gloom as executives grappled with the future of the country’s biggest creditors.
“Banks in permanent crisis” headlined the Neue Zuercher Zeitung newspaper on Saturday’s front page.
Source: Terra
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