Banking giant UBS is in discussion to take over all or parts of Credit Suisse as one of the biggest Swiss lenders heads into a make-or-break weekend with its rival, reported FT.
Swiss regulators are pushing UBS to look at various ways it could be involved with a solution for Credit Sussie. As per the FT report, the deliberations are ongoing and it’s unclear whether any deal will take place or not.
Source with the knowledge of matter said that regulators are encouraging to merge, but both the banks are resistant to do so. The regulators do not hold the power to force the merger, the person said.
Credit Sussie shares saw a jump of 9 per cent in after-market trading following the merger reports.
This deal would address a rout for Credit Suisse that sent shock waves across the global financial system this week when panicked investors dumped its shares and bonds following the collapse of several smaller US lenders.
A liquidity lifeline by the Swiss Central Bank briefly arrested the declines, but the market drama carries the risk that clients or counterparties would continue fleeing, with potential ramifications for the boarder industry.
The Swiss government and the central bank have been in close contact to discuss further ways to stabilize Credit Suisse, Bloomberg reported. The people related to the matter said that UBS would prefer to focus on its own wealth-centric standalone strategy and is reluctant to take on risks related to Credit Suisse. Meanwhile, Credit Sussie is seeking time to see through its turnaround after winning the $54 billion credit line from the central bank.
