UBS Group AG and Credit Suisse Group AG are reportedly in talks to combine in what would be the most significant banking merger in Europe since the 2008 Great Recession, according to a report from the Financial Times. Swiss National Bank, along with Swiss regulators, are arranging the talks in an effort to bolster confidence in the country’s banks.[0]
The people involved in the private discussions said that UBS wished to remain focused on its wealth-focused single strategy and was unwilling to take on risks related to Credit Suisse.[1] The smaller competitor is trying to make it through its turnaround with the aid of a liquidity backstop from the central bank, according to sources.[2]
Credit Suisse could also pursue a breakup of the lender, with the wealth management business going to UBS or another buyer, the Swiss unit being separated as a new entity to protect Swiss deposits, and the asset management and investment banking operations being divested or separated, two people said previously.[3]
The discussions come after a harrowing week for Credit Suisse, which saw its stock fall to an all-time low, and its largest shareholder, Saudi National Bank, warning it would be unable to invest more cash into the bank without facing regulatory hurdles.[4] To make matters worse, the Zurich-based bank then secured a $50 billion lifeline from the Suisse National Bank.[4]
Spokespeople for UBS and Credit Suisse declined to comment, while the Swiss government did not immediately respond to e-mailed request for comment.[5] Bloomberg reported on Friday that UBS and Credit Suisse are against a forced merger, according to people who are aware of the situation.[6]
UBS and Credit Suisse are reportedly in talks to combine in what could be a massive banking merger in Europe since the 2008 Great Recession, according to a report from the Financial Times. The two Swiss banks are discussing an array of solutions, with UBS assessing the potential risks a deal could have for itself, but both banks are opposed to a forced combination.[6] The boards at Switzerland’s top two banks expect to meet separately this weekend to weigh the idea of a combination, with talks orchestrated by the Swiss National Bank and regulator Finma.[7]
0. “UBS in discussions to buy Credit Suisse: report” MarketWatch, 17 Mar. 2023, https://www.marketwatch.com/story/ubs-in-discussions-to-buy-credit-suisse-report-2e026881
1. “Morning Coffee: UBS and Credit Suisse, or not. Citi’s big banker reprimanded for his WhatsApps” eFinancialCareers (US), 17 Mar. 2023, https://www.efinancialcareers.com/news/2023/03/ubs-and-credit-suisse
2. “UBS, Credit Suisse Are Said to Oppose Idea of Forced Tie-Up (2)” Bloomberg Law, 16 Mar. 2023, https://news.bloomberglaw.com/mergers-and-acquisitions/ubs-credit-suisse-are-said-to-oppose-idea-of-forced-combination
3. “UBS, Credit Suisse not in favour of obligatory merger” Private Banker International, 17 Mar. 2023, https://www.privatebankerinternational.com/news/ubs-credit-suisse/
4. “UBS in talks to buy troubled Credit Suisse, FT reports” Business Insider, 17 Mar. 2023, https://www.businessinsider.com/ubs-in-talks-acquire-credit-suisse-bank-report-2023-3
5. “UBS is in talks to take over all or part of Credit Suisse, sources tell the Financial Times” CNBC, 17 Mar. 2023, https://www.cnbc.com/2023/03/17/ubs-is-in-talks-to-take-over-all-or-part-of-credit-suisse-sources-tell-the-financial-times.html
6. “UBS said to be in talks to take over embattled lender Credit Suisse (NYSE:CS)” Seeking Alpha, 17 Mar. 2023, https://seekingalpha.com/news/3948655-ubs-said-to-be-in-talks-to-take-over-embattled-lender-credit-suisse
7. “Credit Suisse-UBS Combination Is Regulators’ ‘Plan A,’ FT Says” Bloomberg, 17 Mar. 2023, https://www.bloomberg.com/news/articles/2023-03-17/credit-suisse-ubs-combination-is-regulators-plan-a-ft-says