UBS is offering to buy Credit Suisse for up to $1 billion, the Financial Times reports
- A sale to UBS, which could be signed as early as tonight, values Credit Suisse at about $7 billion less than its market value at Friday’s close.
- It comes after Credit Suisse shares posted their worst weekly decline since the outbreak of the coronavirus pandemic.
- This despite an announcement that they would be able to access a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.
A customer walks towards an ATM inside a Credit Suisse Group AG bank branch in Geneva, Switzerland, Thursday, September 1, 2022.
Jose Cendón | Bloomberg | Getty Images
Swiss banking giant UBS offered on Sunday to buy its embattled rival Credit Suisse for up to $1 billion, according to the Financial Times, citing four people with direct knowledge of the situation.
The deal, which the FT said could be signed as early as Sunday evening, values Credit Suisse at around $7 billion less than its market value at Friday’s close.
The FT said UBS had offered a price of 0.25 Swiss francs ($0.27) per share to be paid in UBS stock. Credit Suisse shares ended Friday at 1.86 Swiss francs. The rapid nature of the negotiations means that the terms of any final agreement may differ from those reported.
However, Credit Suisse claims it is too low and will harm shareholders and employees, people with knowledge of the matter told Bloomberg.
Credit Suisse declined to comment on the reports when contacted by CNBC.
The UBS offer comes after Credit Suisse shares posted their worst weekly decline since the outbreak of the coronavirus pandemic, despite an announcement that it would access a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.
It had already battled a series of losses and scandals, and last week the mood was rocked again with the collapse of Silicon Valley Bank and the closure of Signature Bank in the US, sending shares tumbling.
Credit Suisse’s scale and potential impact on the global economy is much greater than the US banks. The Swiss bank’s balance sheet is around twice the size of Lehman Brothers at the time of its collapse, at around 530 billion Swiss francs by the end of 2022. It is also far more globally interconnected, with more international subsidiaries – making for a tidy management of Credit Suisse’s situation even more important.
Credit Suisse lost around 38% of its deposits in the fourth quarter of 2022, revealing in its delayed annual report early last week that the outflows have yet to reverse. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further “significant” loss in 2023.
The bank had previously announced a massive strategic overhaul in an attempt to address these chronic problems, with current CEO and Credit Suisse veteran Ulrich Koerner taking over in July.
This is a developing story. Please check back for updates.