- A sale to UBS, which could be signed as early as tonight, values Credit Suisse at about $7 billion less than market value at Friday’s close.
- It comes after Credit Suisse shares recorded their worst weekly decline since the start of the coronavirus pandemic.
- This despite an announcement that it would access a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.
A customer walks towards an ATM inside a Credit Suisse Group AG bank branch in Geneva, Switzerland, Thursday, Sept. 1, 2022.
Jose Cendón | Bloomberg | Getty Images
Swiss banking giant UBS offered to buy its embattled rival Credit Suisse for up to $1 billion on Sunday, according to the Financial Times, citing four people with direct knowledge of the situation.
The deal, which the FT said could be signed as early as Sunday evening, is valued by Credit Suisse at about $7 billion less than the market value at Friday’s close.
The FT said UBS had offered a price of 0.25 Swiss francs ($0.27) a share, payable in UBS shares. Credit Suisse shares ended Friday at 1.86 Swiss francs. The rapid nature of negotiations means that the terms of any final agreement may differ from those reported.
Credit Suisse is said to be skeptical of the offer, but claims it is too low and will hurt shareholders and employees, people with knowledge of the matter told Bloomberg.
Credit Suisse declined to comment on the reports when contacted by CNBC.
The UBS offer comes after Credit Suisse shares posted their worst weekly decline since the start of the coronavirus pandemic, despite an announcement that it would access a loan of up to 50 billion Swiss francs ($54 billion ) from the Swiss National Bank.
It had already struggled with a series of losses and scandals, and last week sentiment was rocked again with the collapse of Silicon Valley Bank and the closure of Signature Bank in the US, sending shares tumbling.
Credit Suisse’s scale and potential influence on the global economy is much greater than the US banks. The Swiss bank’s balance sheet is about twice the size of Lehman Brothers when it collapsed, at about 530 billion Swiss francs by the end of 2022. It is also far more globally connected with several international subsidiaries – making orderly management of Credit Suisse’s situation even more important.
Credit Suisse lost around 38% of its deposits in the fourth quarter of 2022 and revealed in its delayed annual report early last week that the outflows have still not reversed. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further “significant” loss in 2023.
The bank had previously announced a massive strategic overhaul in an attempt to address these chronic problems, with current CEO and Credit Suisse veteran Ulrich Koerner taking over in July.
This is a development story. Please check back for updates.