Swiss bank is considering purchase: UBS is in talks about a Credit Suisse takeover

Swiss bank checks purchase
UBS is in talks about a Credit Suisse takeover

The major bank Credit Suisse is experiencing a turbulent week. The Swiss National Bank throws out the lifeline at the last minute – but investors remain concerned. Now the largest Swiss bank UBS is considering buying the ailing rival.

Switzerland’s largest bank UBS is reportedly in talks to buy its troubled rival Credit Suisse. Swiss regulators have indicated to their US and UK counterparts that such a purchase is “their Plan A” for ending the Credit Suisse crisis, the Financial Times reported, citing anonymous sources.

The Swiss National Bank (SNB) is therefore hoping for a “simple solution before the markets open on Monday”. UBS is examining what risks a complete or partial purchase of its rival entails, it said. UBS and Credit Suisse declined to comment on the report. According to insiders, extraordinary meetings of different teams have been scheduled for the weekend. Financial data should be processed and scenarios for the future of the major Swiss bank worked out, as people familiar with the situation told the Reuters news agency on Friday.

According to a media report, UBS and Credit Suisse reject a forced merger. UBS prefers to focus on its existing strategy and is reluctant to take risks related to troubled Credit Suisse, Bloomberg news agency reported, referring to insiders. Credit Suisse wants to take its time to turn the tide on its own.

50 billion Swiss francs from the SNB

The SNB only intervened on Thursday night with a massive intervention by the major bank Credit Suisse. It provided up to 50 billion Swiss francs (50.7 billion euros) for the country’s second largest bank.

Despite this massive support, the Credit Suisse price collapsed again on Friday. Credit Suisse shares were up 9 percent after hours. In regular trading in Switzerland, they fell by around eight percent on Friday.

The market value of Credit Suisse had already suffered a severe setback this week after the bankruptcy of two banks in the USA fueled fears of contagion and the prices of many banks in Europe fell as a result. Credit Suisse is among the 30 banks worldwide classified as “too big to fail” because their failure would have a devastating impact on the wider economy.

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