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The potential end of Credit Suisse as a stand-alone entity 167 years after its founding is not entirely a surprise.
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UBS
Group could finalize the acquisition of
Swiss credit
Group as early as Saturday night, according to the Financial Times, as regulators rush to sign off on a merger of Switzerland’s two biggest banks amid turmoil in the sector.
Both
Swiss National Bank
and regulator Finma now view buying UBS (ticker: UBS) as the only option to tame growing problems at Credit Suisse (CS), the FT reported on Saturday, citing unnamed sources familiar with the negotiations.
Credit Suisse declined to comment on the report, while UBS did not respond. Barrons request for comment.
black rock
(BLK) has previously been cited as another possible suitor, although it has since publicly denied involvement in a takeover.
The urgency for a deal comes as investors continue to withdraw money from Credit Suisse, which saw outflows of nearly $11 billion a day at the end of last week. The bank also saw more than $450 million in net outflows from its managed funds in the U.S. and Europe from March 13-15, Morningstar Direct said on Friday, as retail and institutional counterparties pulled money from funds managed by the struggling Swiss lender.
Credit Suisse’s potential end as a stand-alone entity 167 years after its founding isn’t entirely a surprise: The bank has faced a range of issues in recent years, ranging from concerns over its financial controls to government investigations. , going through court setbacks, and several quarters of eye-popping losses, among other issues, that have left investors wondering if he will survive.
Still, the timeline for a resolution has accelerated in recent weeks, following high-profile bank failures in the United States, including Silicon Valley Bank, whose assets are also on the market for a buyer.
The closure of SVB has sparked fears around the world over the health of the industry, prompting many customers to try to withdraw their funds and putting particular pressure on weaker bank stocks amid wide swings in the market. market. Credit Suisse shares have fallen more than 17% in the past five trading days and have lost more than a third of their value so far in 2023.
UBS was also hit by the sell-off in financial stocks, falling more than 7% last week, although it is down just 4% this year.
According to FT sources, the talks are now centered on the concessions UBS is seeking should it strike a deal. The bank wants to be able to phase in any global capital regulations over time and protect itself from ongoing legal costs, which Credit Suisse says could cost it some $2 billion.
Write to Teresa Rivas at teresa.rivas@barrons.com
