UBS’s Possible Acquisition of Credit Suisse: What You Need to Know
Switzerland-based Credit Suisse was embroiled in the turmoil stemming from the collapses of US lenders Silicon Valley Bank and Signature Bank last week.
Multinational investment bank UBS has reportedly asked the Swiss government to cover the cost of about $6 billion if it were to buy a rival. credit suisse.
Authorities are rushing to resolve the crisis of confidence in the 167-year-old Swiss-based organization. The organization is the world’s most important bank embroiled in turmoil spurred by the collapse of US lender Silicon Valley Bank and its signatories over the past few weeks.
Here’s what you need to know about the potential acquisition.
Any updates on the negotiations?
- The guarantees sought by UBS cover Credit Suisse’s partial closure costs and potential litigation costs.
- UBS, also based in Switzerland, was reportedly under pressure from Swiss authorities to buy out a local rival to control the crisis. Under this plan, Credit Suisse’s Swiss business may be spun off.
- According to Reuters, a source warned that talks face serious obstacles and could have to cut 10,000 jobs if the two banks merge.
- The Financial Times reported that Switzerland is preparing to take emergency measures to expedite the deal.
- According to Bloomberg News, U.S. officials are working with Swiss authorities to help broker the deal.
- According to Swiss newspaper Blick, UBS has acquired Credit Suisse, and the deal is expected to be signed on Sunday at a special meeting in Bern for senior Swiss government and bank officials.
- There have been multiple reports of interest in Credit Suisse from other rivals as well. Bloomberg reported that Deutsche Bank is considering buying some of its assets.
Why is Credit Suisse in crisis?
- Credit Suisse shares lost a quarter of their value last week.
- the bank was forced to wiretap $54 billion for central banks It is recovering from a series of scandals that have eroded investor and customer confidence.
- Credit Suisse has been plagued by a string of scandals in recent years. The share price in February 2021 was 12.78 Swiss francs ($13.84).
- In 2022, the bank suffered a net loss of $7.9 billion and expects a “significant” pre-tax loss this year.
How important is Credit Suisse?
- Credit Suisse is one of the world’s largest wealth managers and, importantly, one of 30 global systemically important banks, whose failure could have ripple effects across the financial system .
- Credit Suisse is a local wealth management, investment bank, Swiss local bank and wealth management business.
- It employs just over 50,000 people and has CHF 1.3 trillion ($1.4 trillion) under management at the end of 2022, down from 1.6 trillion a year earlier.
- Credit Suisse is a private bank with more than 150 offices in approximately 50 countries and a large clientele of high net worth individuals and businesses.