UBS Group AG (NYSE:UBS) and Credit Suisse Group AG (NYSE:CS) may be on the brink of a major banking merger, according to the Financial Times. The report cites people familiar with the matter as saying that Swiss regulators are pushing for the merger as a way to restore confidence in the nation’s banking system.
The potential deal could involve UBS acquiring Credit Suisse to obtain its wealth and asset management units, while divesting the investment banking division. Should the merger go through, the two banks would create one of the biggest global systemically important financial institutions in Europe, with $1.1tn total assets on UBS’s balance sheet and $575bn on Credit Suisse’s.[0]
Despite the urging of regulators, both banks are against the idea of a forced merger, Bloomberg reported citing people familiar with the issue.[1] People familiar with the matter, who asked to remain anonymous since the conversations are confidential, stated that UBS would rather concentrate on its own wealth-oriented individual strategy and is unwilling to assume risks associated with Credit Suisse.[1]
U.S. investment giant BlackRock has denied it is participating in any plans to acquire Credit Suisse, with a company spokesperson telling CNBC Saturday morning that they have no interest in doing so.[2]
The boards of both banks are meeting this weekend to discuss the situation, according to the Financial Times.[3] Other solutions reportedly being considered could involve further split-ups of Credit Suisse’s business or an IPO of the domestic business, while divesting the wealth management and asset management businesses to UBS or another interested party.[4]
UBS, Credit Suisse, the Swiss National Bank (SNB), the Federal Reserve, and the Bank of England have all declined to comment.[0]
0. “UBS and regulators rush to seal Credit Suisse takeover deal: reports” MarketWatch, 18 Mar. 2023, https://www.marketwatch.com/story/ubs-and-regulators-rush-to-seal-credit-suisse-takeover-deal-reports-2f4ccfbc
1. “UBS, Credit Suisse not in favour of obligatory merger” Private Banker International, 17 Mar. 2023, https://www.privatebankerinternational.com/news/ubs-credit-suisse/
2. “BlackRock denies report that it’s preparing a takeover bid for Credit Suisse” CNBC, 18 Mar. 2023, https://www.cnbc.com/2023/03/18/blackrock-is-working-on-a-rival-takeover-bid-for-credit-suisse-financial-times-reports.html
3. “UBS In Talks To Acquire Crisis-Hit Swiss Bank Credit Suisse: Report” NDTV, 18 Mar. 2023, https://www.ndtv.com/world-news/ubs-to-explore-credit-suisse-deal-in-crisis-combination-report-3871538
4. “UBS and Credit Suisse Considering Possible Merger” finews.com, 18 Mar. 2023, https://www.finews.com/news/english-news/56305-ubs-credit-suisse-merger