UBS reportedly may acquire all or parts of the failing lender, with discussions to be held over the weekend
Swiss financial regulators, the Swiss National Bank and the Swiss Financial Market Supervisory Authority (FINMA), are organizing talks between the country’s two largest banks, UBS and Credit Suisse, to discuss a potential merger between the lenders, Bloomberg and Financial Times reported on Friday citing sources.
According to the reports, UBS is exploring an acquisition of all or parts of Credit Suisse. The boards of the two banks are also expected to meet separately this weekend to evaluate the idea of a merger.
Zurich-based Credit Suisse has been battling a string of scandals, legal issues and customer outflows that have sent its shares tumbling. The most recent hurdle came after its biggest investor, Saudi National Bank (SNB), announced it would not be able to provide financial assistance due to regulatory and statutory limits. The situation was exacerbated by the collapse of several smaller US lenders last week, which sent shockwaves across the global banking industry and triggered bank runs. The bank’s shares closed lower by nearly 7% on Friday, and were down 24% for the week.
A Bloomberg source indicated that a decision on the merger may be announced as early as Sunday evening. However, the news outlet earlier reported that both UBS and Credit Suisse were skeptical over the merger, with the latter expecting to be able to fix the situation through its $54 billion loan from the Swiss central bank, while the former is reluctant to take on risks related to Credit Suisse. The market value of UBS is about $60 billion at the moment, while Credit Suisse’s amounts to a mere $8 billion.
Both UBS and Credit Suisse have so far declined to comment on the merger reports.
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