Credit Suisse Bank: UBS is said to be in takeover talks with troubled rival – BBC
- by Katherine Armstrong
- BBC News
March 19, 2023, 01:46 GMT
Updated 9 minutes ago
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Credit Suisse has faced several scandals in recent years, including allegations of money laundering
Switzerland’s biggest bank, UBS, is reported to be in advanced talks to fully or partially buy its troubled rival Credit Suisse.
Shares of Credit Suisse have declined sharply in recent days after it said it found “material weaknesses” in its financial reporting.
An emergency $54bn (£44.5bn) lifeline from the Swiss National Bank has not resolved the issue.
Regulators are trying to facilitate the deal before markets reopen on Monday.
There are concerns that Credit Suisse shares could continue to slide after falling 24% on Wednesday.
This prompted a general selloff in European markets and fears of a wider financial crisis.
The Swiss government held an emergency meeting on Saturday night, but so far there has been no official word on the progress of the talks.
UBS is said to have asked the Swiss government to cover the costs of about $6bn (£4.9bn) to buy Credit Suisse, according to sources cited by Reuters.
Any deal could also result in significant job losses.
The problems coincide with the failure of two lenders in the US – Silicon Valley Bank and Signature Bank – raising fears over the health of the banking system.
Credit Suisse, which was founded in 1856, has faced several scandals in recent years, including allegations of money laundering.
It reported losses of 7.3bn Swiss francs ($7.9bn; £6.5bn) in 2022 – its worst year since the 2008 financial crisis – and warned it does not expect to turn profitable until 2024.
However, UBS projects a profit of $7.6bn in 2022.
In addition to being a domestic bank with 95 branches, Credit Suisse has a global investment banking operation and manages the wealth of wealthy clients.
It is one of 30 banks around the world that are considered too big to fail because they are so important to the international banking system.
Credit Suisse had a global workforce of 50,480 at the end of last year, including 16,700 in Switzerland, although 9,000 jobs were to be eliminated, Swiss broadcaster SRF reported.