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Zurich (Switzerland) (AFP) – UBS has agreed to buy Credit Suisse for more than $3.25 billion. The figure came after the Financial Times previously disclosed the deal. Recently beaten on the stock market, Credit Suisse is among the 30 most important banks in the world from a systemic point of view.
The spectacular stock market crash of Credit Suisse this week generated nervousness in the financial world, sensitized after the collapse of entities in the United States.
In a landmark deal, UBS, Switzerland’s largest banking group, will pay 3 billion Swiss francs ($3.23 billion) for Credit Suisse.
UBS has offered to take control of its competitor as part of a plan devised by Swiss authorities to try to avoid turmoil when financial markets reopen on Monday.
Battered on the stock market last week after the decision of its main shareholder to return to the pot, Credit Suisse is among the 30 most important banks in the world from a systemic point of view. His bankruptcy would send shock waves through the entire global financial sector.
Therefore, this transaction is being analyzed since the morning by the federal government in the Swiss capital Bern, after other emergency meetings on Thursday and Saturday.
According to the Blick tabloid, the fate of Credit Suisse will be sealed in an extraordinary meeting between the government and the managers of the two entities in Bern.
Such a merger is a complex affair that would normally take months to complete, but under pressure from the authorities, UBS will have to close the deal within a few days.
pressures
The Swiss authorities consider that there is no choice but to push UBS to overcome the reluctance, under pressure from Switzerland’s main economic and financial partners, who fear for the stability of their own financial markets, according to Blick.
Swiss banking rules state that UBS should consult its shareholders for a period of six weeks, but emergency measures could be applied for this operation, according to the Financial Times business daily, citing sources who asked to remain anonymous.
The bank registered a record fall on Wednesday and its stock market value plummeted to 7,000 million Swiss francs, about 7,580 million dollars, which is an almost small sum for an entity considered to be of systemic importance, so its bankruptcy must be avoided. .
According to the Financial Times and Blick, the bank’s clients withdrew 10 billion Swiss francs in deposits in one day at the end of last week, a tangible indication of distrust of the institution.
These negotiations take place after a black week on the stock market in which the Swiss central bank had to intervene and lent Credit Suisse 53.7 billion dollars to give it a breath of fresh air and try to appease the nervousness of investors, without success.
public guarantees
According to the Bloomberg agency, UBS requires public authorities to pay legal costs and potential losses that can amount to billions of Swiss francs.
The negotiation focused on Saturday around the activities of the investment bank, according to the financial agency, and one of the hypotheses to get out of the crisis is that the purchase is partial and leaves this division out.
At the end of October, Credit Suisse presented a huge restructuring plan that included cutting 9,000 jobs by 2025, representing 17% of its workforce.
The entity, with a workforce of 52,000 people at the end of October, wanted to focus on more stable activities and radically transform its business banking.
For its part, the Swiss bank employees’ union “demanded” on Sunday that its delegates participate in the negotiation, taking into account the “enormous” consequences of the operation on the workforce.
