UBS offers to buy Credit Suisse for up to $1 billion, Financial Times reports

A customer walks towards an automated teller machine (ATM) inside a Credit Suisse Group AG bank branch in Geneva, Switzerland, on Thursday, September 1, 2022.

Jose Cendon | Bloomberg | beautiful pictures

Swiss banking giant UBS on Sunday offered to buy its embattled rival Credit Suisse for up to $1 billion, according to the Financial Timesquoted four people with direct knowledge of the situation.

The deal, which the FT said could be signed as early as Sunday night, valued Credit Suisse about $7 billion below its market value as of late Friday.

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The FT said UBS offered a price of 0.25 Swiss francs ($0.27) for a share paid in UBS shares. Credit Suisse shares ended Friday at 1.86 Swiss francs. The fast-paced nature of the negotiations means that the terms of any final agreement may differ from those reported.

Credit Suisse declined to comment on the report when contacted by CNBC.

It appeared after Credit Suisse shares logged in worst weekly drop since the start of the coronavirus pandemicdespite the announcement that it would access a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.

It fought with a series of losses and scandalsand last week, sentiment was shaken again with the collapse of Silicon Valley Bank and the closure of Signature Bank in the United States, sending stocks plunging.

Credit Suisse’s size and potential impact on the global economy is much larger than that of US banks. The Swiss bank’s balance sheet was twice the size of Lehman Brothers when it collapsed, at around 530 billion Swiss francs at the end of 2022. It’s also more globally interconnected, with many companies. international subsidiaries — making the orderly management of Credit Suisse’s situation even more important.

Credit Suisse lost about 38% of its deposits in Q4 2022 and disclosed in the annual report was delayed early last week that the outflow has not yet reversed. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a “significant” additional loss in 2023.

The bank previously announced a major strategic overhaul to address these chronic problems, with Current CEO and Credit Suisse veteran Ulrich Koerner will take over in July.

This is an evolving story. Please check back for updates.


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