UBS offers to buy Credit Suisse for $1bn in race to save bank

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A sign of Credit Suisse is seen behind a clock at the headquarters of Switzerland’s second largest bank in Zurich on March 18, 2023. by Financial Times. Credit Suisse came under pressure this week as the failure of two US regional lenders rocked the region. (Photo by Fabrice Cofrini / AFP) (Photo by Fabrice Cofrini / AFP via Getty Images) – Fabrice Cofrini / AFP via Getty Images

UBS offers to buy Credit Suisse for up to $1bn as Swiss executives The race to save the troubled lender,

The all-share deal could be signed as soon as Sunday, the Financial Times reported, although Credit Suisse was reportedly unhappy with the heavily discounted offer.

The Swiss government is said to be planning to change the country’s laws to bypass the shareholder vote to expedite the transaction. Fearing another sharp drop in Credit Suisse’s share price, executives are racing to get a deal done before the market opens on Monday.

Swiss authorities have turned to UBS for a deal that would put the bank under national control.

However, UBS is cautious about taking on the troubled lender without full knowledge of its business.

Bloomberg reported that Credit Suisse was also said to be unhappy with a takeover offer made by its rival.

UBS is offering 0.25 Swiss francs ($0.27) per Credit Suisse share, far below Friday’s closing price of 1.86 Swiss francs and wiping out the bank’s existing shareholders.

Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.

Authorities are scrambling to save the 167-year-old bank, one of the world’s largest wealth managers.

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credit suisse share lost a quarter of its value in the last week And the bank was forced to ask the Swiss National Bank for up to £44 billion in support.

Despite the central bank agreeing, Credit Suisse continued to post withdrawals and signs of financial stress late last week as banks and customers rushed to cut ties.

The front page of the Swiss newspaper NZZ am Sonntag on Sunday carried the headline “Credit Suisse’s last day” over an illustration of the bank’s headquarters in flames.

As one of 30 global systemically important banks, a Credit Suisse failure would ripple across the financial system.

Bloomberg reports that US officials are working with their Swiss counterparts to help broker a deal.

Sky News said the Bank of England has indicated it would support the proposed takeover of Credit Suisse.

Reuters said UBS has asked the Swiss government for $6 billion to cover potential losses on the deal. The guarantees would cover the costs of winding up parts of Credit Suisse and the costs of potential litigation.

The bank also wants to insert a clause that would allow UBS to back out if UBS’s credit default swaps exceed a certain level, which would signal that investors are nervous about its financial position.

Frenzied weekend talks over Credit Suisse’s future follow a brutal week for banking stocks The collapse of US lenders Silicon Valley Bank and Signature Bank,