UBS, the first Swiss bank, is in talks for the total or partial takeover of Credit Suisse, its rival in great difficulties, with the express blessing of the Swiss regulatory authorities, it said on Friday, March 17. financial time (FT).
Swiss regulators – the central bank (SNB) and the financial market watchdog (Finma) – told their American and British colleagues that the UBS takeover was “their plan A” to stop the crisis of confidence that it is suffering. Credit Suisse, writes the FT, citing an anonymous source with knowledge of the talks.
The Swiss central bank “wants a simple solution before the markets open on Monday,” he told the business daily, acknowledging that it is not certain that an agreement can be reached.
UBS wants to assess what risks a takeover of all or part of its rival might pose to its own business, another anonymous source told the FT.
No comment
Questioned by AFP, the SNB replied that it “does not comment” like Credit Suisse. UBS and Finma did not immediately respond to the requests.
Credit Suisse has been in crisis for two years, but things picked up speed on Wednesday when investors, rocked by the failure of Silicon Valley Bank in the United States, sold shares in the second-largest Swiss bank.
Credit Suisse has been considered a weak link in the banking sector since a series of scandals and a restructuring plan that it struggles to convince.
At the end of the day on Wednesday, the Zurich bank’s market capitalization was less than 7 billion Swiss francs, a paltry sum for one of the world’s 30 banks considered too big to fail.
On Wednesday night, after being silent all day, the Swiss central bank offered verbal support and offered liquidity.
Overnight from Wednesday to Thursday, Credit Suisse borrowed 53 billion Swiss francs from him to get a breath of fresh air and move forward with its restructuring.
For the SNB, it was about reassuring markets around the world.
It worked for a while, but shares fell more than 8% on Friday.
This bank, founded in 1865, which was a key player in the Swiss economic miracle, is only worth 8,000 million Swiss francs on the stock market, when UBS is worth 56,600 million.
frequent assumption
The possibility of a takeover of Credit Suisse by a bank had also been mentioned by JP Morgan analysts this week, “with UBS as a potential option.”
Given the weight this merger would confer on the two banks, they envision Credit Suisse’s Swiss branch, which includes retail banking and SME lending, could go public or be spun off.
With its shares falling to a record low of 1.55 Swiss francs on Wednesday, Credit Suisse’s market capitalization has melted, which could make the bank easy prey to absorb.
The idea of a merger of the two largest Swiss banks resurfaces regularly, but is generally dismissed on competition grounds and the risks to the stability of the Swiss financial system given the weight a merger would give them.
As for UBS, it has been recovering from its severe crisis in 2008 for several years, and it is not sure it wants to embark on a new restructuring now that it is beginning to reap the rewards of its effort.
Source: BFM TV
