UBS agrees to buy troubled Credit Suisse for more than $2 billion ‘to secure financial stability’
UBS, Switzerland’s largest bank, has agreed to buy rival Credit Suisse for more than $2 billion in an emergency deal to avoid turmoil from The current banking crisis.
The Swiss National Bank announced the deal on Sunday, saying it “will secure financial stability and protect the Swiss economy,” in the wake of the panic in global markets following the fall of the Swiss economy. Silicon Valley Bank And signature bank.
Credit Suisse shares fell 25% last week, prompting a rush of banks by customers that led to withdrawals totaling $10 billion per day, the Financial Times reports.
In order to prevent a complete meltdown on Monday, Swiss officials agreed to accelerate the acquisition of UBS, offering a $100 billion liquidity line to Credit Suisse as part of the deal.
The agreement comes just a day after a meeting between UBS and the Swiss National Bank, where the company initially offered $1 billion for the acquisition. Now, UBS will pay about 54 cents a share of its stock to secure the deal.
UBS and Credit Suisse are among the 30 largest banks in the world and have assets worth about $1.7 trillion together, and their corporate headquarters are located in Zurich.
Credit Suisse was the one who was better off 15 years ago during the 2008 financial crisis, as UBS was the bank that needed government help at the time.
But Credit Suisse has seen its shares fall 84% over the past two years, and UBS instead has seen its shares rise 15%.
As the second largest bank in Switzerland, Credit Suisse employs more than 50,000 people at the end of 2022.
The bank saw its share price drop 30% overnight Wednesday after market fears of the collapse of SVB and Signature Bank, with the Swiss National Bank offering a $54 billion lifeline that was unable to save the bank.
Together with the merger of the Swiss banking giants, S&P Global Inc. First Republic Bank is expected to downgrade, again, less than a week after its initial ratings downgrade.
sources said bloomberg The rating company will announce the downgrade from BB+ to B+ only this week, just days after it downgraded its rating from A-, due to the effects of the current banking crisis.
“Following Thursday’s $30 billion unsecured deposit by the country’s 11 largest banks, along with cash on hand, First Republic Bank is well positioned to manage its short-term deposit activity,” the bank said in a statement. “This support reflects the confidence in First Republic and its ability to continue to provide exceptional and unwavering service to its customers and communities.”
S&P did not respond to The Post’s request for comment on Sunday.
