Skip to main content

Biggest Swiss Bank Agrees To Buy Credit Suisse, Doubles Its Offer: Report

Biggest Swiss Bank Agrees To Buy Credit Suisse, Doubles Its Offer: Report

UBS was being urged by the authorities to get a deal over the line.

Bern:

UBS has agreed to take over its troubled Swiss rival Credit Suisse after doubling its offer to $2 billion, the Financial Times reported amid urgent talks Sunday aimed at sparing the embattled bank from a bloodbath when the markets reopen.

The two largest banks in the wealthy Alpine nation famed for its banking prominence have been in negotiations throughout the weekend, with the government, the central bank and financial regulators all involved.

The Financial Times newspaper, which was the first on Friday to report the prospect of Switzerland's biggest bank swallowing up Credit Suisse, said UBS had agreed to buy it for $2 billion, with its fellow Zurich-based lender having spurned an earlier offer of $1 billion.

The FT said shareholders would get 0.50 Swiss francs ($0.54) per share, with the deal to be done on Sunday before the markets open in Asia.

After suffering heavy falls on the stock market last week, Credit Suisse's share price closed Friday at 1.86 Swiss francs, with the bank worth just over $8.7 billion.

Credit Suisse's share price has tumbled from 12.78 Swiss francs in February 2021 due to a string of scandals that it has been unable to shake off.

- Time is money -

UBS was being urged by the authorities to get a deal over the line before the stock exchange reopens at 0800 GMT on Monday, in a bid to reassure investors and avoid a wave of contagious panic on the markets.

The Swiss authorities felt they had no choice but to push UBS into overcoming its reluctance, due to the enormous pressure exerted by Switzerland's major economic and financial partners, fearing for their own financial centres, said Blick newspaper.

A merger of this scale -- involving swallowing up all or part of a bank arousing growing investor unease -- would normally take months.

While under Swiss rules, UBS would typically have to consult shareholders over six weeks, it could use emergency measures to skip the consultation period and a shareholder vote, the FT said, citing unnamed sources.

The 20 Minuten newspaper filmed members of the Swiss government, including President Alain Berset, heading into the finance ministry in Bern early Sunday.

The government did not respond when contacted by AFP on Sunday.

- 'Merger of the century' -

The central bank chief, Swiss National Bank chairman Thomas Jordan, was seen by AFP leaving the finance ministry.

Credit Suisse, the SNB and the Swiss financial watchdog FINMA all declined to comment on the negotiations when contacted by AFP.

The SonntagsZeitung newspaper called it "the merger of the century".

"The unthinkable becomes true: Credit Suisse is about to be taken over by UBS," the weekly said.

The government, FINMA and the SNB "see no other option", it claimed.

"The pressure from abroad had become too great -- and the fear that the reeling Credit Suisse could trigger a global financial crisis," it said.

David Benamou, chief investment officer of Paris-based Axiom Alternative Investments, said: "The Credit Suisse management, even if forced to do so by the authorities, would only choose (a UBS takeover) if they have no other solution."

The Swiss Bank Employees Association said there was "a great deal at stake" for the 17,000 Credit Suisse staff, "and therefore also for our economy".

"In addition, tens of thousands of jobs outside of the banking industry would potentially be at risk," it added, calling for a task force to be established to manage the situation.

- Too big to fail? -

Like UBS, Credit Suisse is one of 30 banks around the world deemed to be Global Systemically Important Banks -- of such importance to the international banking system that they are considered too big to fail.

But the market movement seemed to suggest the bank was being perceived as a weak link in the chain.

"We are now awaiting a definitive and structural solution to the problems of this bank," French Finance Minister Bruno Le Maire told Le Parisien newspaper.

Amid fears of contagion after the collapse of two US banks, Credit Suisse's share price plunged by more than 30 percent on Wednesday to a new record low of 1.55 Swiss francs. That saw the SNB step in overnight with a $54-billion lifeline.

After recovering some ground Thursday, its shares closed down eight percent on Friday at 1.86 Swiss francs as the Zurich-based lender struggled to retain investor confidence.

In 2022, the bank suffered a net loss of $7.9 billion and expects a "substantial" pre-tax loss this year.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Adblock test (Why?)



from NDTV News- Special https://ift.tt/Ach4dNH https://ift.tt/8AObiHS
via IFTTT

Comments

Popular posts from this blog

North Korea Says It Tested New Strategic Cruise Missile

North Korea test-fired a new generation of strategic cruise missile on Wednesday. (Representational) Seoul: North Korea fired several cruise missiles towards the Yellow Sea on Wednesday, Seoul's military said, the latest in a series of tension-raising moves by the nuclear-armed state. Hours later, North Korea appeared to confirm the firing, saying it had carried out its first test of a new generation of strategic cruise missiles it is developing, the Pulhwasal-3-31. Pyongyang has accelerated weapons testing in the new year, including tests of what it called an "underwater nuclear weapon system" and a solid-fuelled hypersonic ballistic missile. "Our military detected several cruise missiles launched by North Korea towards the Yellow Sea at around 7:00 am today," the South Korean Joint Chiefs of Staff said in a statement. Unlike their ballistic counterparts, the testing of cruise missiles is not banned under current UN sanctions against Pyongyang. Cruise...

18-Year-Old Killed By Friends Over Mobile Game Password In Bengal: Cops

According to cops, accused "friends" attempted to burn the victim after killing him. (Representational) Kolkata: An argument over sharing the password of an online mobile game allegedly led to the murder of a teenage boy by four of his friends in West Bengal's Murshidabad district, a senior police officer said. The body of 18-year-old Papai Das, who had been missing since January 8, was discovered near Nishindra Ghat of the feeder canal in Farakka on Monday, police said. Papai, a class 10 student, was reportedly killed by his four "close" friends after a disagreement over sharing the password for a mobile online game. The accused individuals have been arrested, police added. "These five individuals used to play online games at one of the quarters of the Farakka Barrage. The victim went out on the evening of January 8 and never returned. On January 9, the family lodged a police complaint. "Based on preliminary investigations, we discovered that...

"Jaiswal Has Run Ahead Of Gill": Ex-India Star's Massive T20 WC Verdict

Former India opener Aakash Chopra has suggested that Yashasvi Jaiswal is slightly ahead of Shubman Gill in the pecking order as captain Rohit Sharma's partner at the top in T20Is. Since making his debut last year, Jaiswal has been in stunning form in the shortest format of the game. Gill's form, on the other hand, has dipped since the ODI World Cup last year in India. With the T20 World Cup scheduled to be held later this year, Chopra feels Jaiswal will open the innings with Rohit during the tournament. "It's clear that Yashasvi Jaiswal has run ahead of Shubman Gill. Yashasvi is ahead in the two-horse race, Gill is lagging slightly behind. Gill was played in the first match, dropped in the second, and wasn't played in the third as well," Chopra said on his YouTube channel. Jaiswal helped India beat Afghanistan in the second T20I earlier this week, scoring a quickfire fifty. Considering his recent form across formats, Chopra emphasised that Jaiswal has ...