The transaction amounts to 3 billion Swiss francs (3.02 billion euros) payable in UBS shares, or 76 cents only for a Credit Suisse share which was still worth 1.86 Swiss francs on Friday evening.
The merger between these giants, which are both part of the very closed club of 30 too big to fail banking establishments, therefore had to be completed and announced in time for the opening of the Asian markets. The hope being that this may be enough to prevent widespread panic.
According to the Financial Times and Blick, the bank’s customers withdrew 10 billion Swiss francs in a single day late last week. UBS will benefit from a guarantee of some 9 billion francs from the government which serves as insurance if problems were to be discovered in very specific Credit Suisse portfolios, Ms Keller-Sutter said.
The Central Bank is also extending a liquidity line of up to CHF 100 billion to UBS and Credit Suisse UBS, which has spent several years recovering from the shock of the 2008 financial crisis and a massive state bailout. begins to reap the fruits of its efforts and it took a lot of pressure from the authorities for the management of the bank to agree to put on the habit of savior.
The Competition Commission might also raise eyebrows depending on the configuration of the takeover. The discussions also focused on the fate to be reserved for the Swiss branch of Credit Suisse, one of the profitable parts of the group which lost 7.3 billion Swiss francs last year and is still counting on losses “substantial” in 2023.
This branch brings together retail banking and loans to SMEs. One of the avenues considered by analysts is that of an IPO, which might limit layoffs in Switzerland due to duplication with UBS’s activities.