UBS in talks to acquire all or part of Credit Suisse: Report

Swiss banking giant UBS is reportedly in talks to acquire all of part of Credit Suisse, which is rocked by liquidity crisis, scandals and a sliding stock value.

According to the Financial Times (FT), which has cited multiple sources, the boards of Switzerland’s two biggest lenders are all set to meet separately over the weekend to discuss a possible merger.

However, it is reported that both banks are against a merger despite regulators’ best efforts to do so.

It is said that the negotiation is being orchestrated at the behest of the Swiss National Bank and regulator Finma in a bid to restore confidence in the country’s banking sector.

Swiss regulators on Friday informed their US and UK counterparts that the merger was the “plan A” to arrest a collapse in investor confidence in Credit Suisse, one of the people told FT.

However, the news of the merger failed to revive the market fortunes of Credit Suisse whose shares performed poorly on Friday— the worst since the onset of the coronavirus pandemic.

Credit Suisse lost around 38 per cent of its deposits in the fourth quarter of 2022, and revealed in its delayed annual report earlier this week that outflows are still yet to reverse

The move comes days after the central bank injected an emergency SFr50bn ($54bn) credit line to Credit Suisse on Thursday.

The 167-year-old bank is the latest name to be ensnared by the market turmoil unfolded by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week, forcing Credit Suisse to seek funding from the central bank.

Meanwhile, Reuters news agency reported that at least four major banks, including Societe Generale and Deutsche Bank, had restricted new trades with Credit Suisse. HSBC was also said to be scrutinising loans linked to Credit Suisse securities.

The Swiss lender said that it is a strong, global bank. “We fulfill and basically overshoot all regulatory requirements. Our capital, our liquidity basis is very strong,” chief executive Ulrich Koerner said earlier this week.

(With inputs from agencies)