UBS offers to buy Credit Suisse for up to $1 billion, the Financial Times reports

A customer walks towards an automated teller machine (ATM) inside a branch of Credit Suisse Group AG bank in Geneva, Switzerland, on Thursday, September 1, 2022.

Jose Sandon | Bloomberg | Getty Images

The Swiss banking giant UBS On Sunday, he offered to buy out his beleaguered rival. Credit Suisse up to $1 billion, According to the Financial TimesCiting four people with direct knowledge of the situation.

The deal, which the FT said could be signed by Sunday evening, values ​​Credit Suisse about $7 billion below its market value at Friday’s close.

The FT said UBS had offered a price of 0.25 Swiss francs ($0.27) a share to be paid in UBS stock. Shares of Credit Suisse ended at 1.86 Swiss francs on Friday. The rapid pace of negotiations means that the terms of any final agreement may differ from those reported.

Credit Suisse declined to comment on the report when contacted by CNBC.

This comes after Credit Suisse shares were logged. The worst weekly decline since the start of the coronavirus pandemicdespite announcing that it would access a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.

It was already fighting. A series of losses and scandalsand sentiment was shaken again last week with the collapse of Silicon Valley Bank and the shuttering of Signature Bank in the US, sending shares sliding.

Credit Suisse’s scale and potential impact on the global economy far exceeds that of American banks. The Swiss bank’s balance sheet is nearly twice the size of Lehman Brothers when it collapsed, about 530 billion Swiss francs by the end of 2022. It is increasingly interconnected globally with numerous international subsidiaries – making the systematic management of Credit Suisse’s situation even more important.

Credit Suisse lost nearly 38 percent of its reserves in the fourth quarter of 2022, and revealed The annual report was delayed early last week. That emissions are still to be reversed. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a “substantial” further loss in 2023.

The bank had earlier announced a major strategic shift in an effort to address these chronic issues. Current CEO and Credit Suisse veteran Ulrich Koerner takes over in July..

This is a developing story. Please check back for updates.

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