- A sale to UBS, which could be signed as early as tonight, values Credit Suisse around $7 billion below its market value on Friday.
- It comes after Credit Suisse shares posted their worst weekly decline since the coronavirus pandemic began.
- This is despite an announcement that it would be accessing a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.
A customer approaches an ATM at a bank branch of Credit Suisse Group AG in Geneva, Switzerland, on Thursday, September 1, 2022.
Jose Cendon | Bloomberg | Getty Images
Swiss banking giant UBS has offered to buy its embattled rival Credit Suisse for up to $1 billion, citing four people with direct knowledge of the situation, according to the Financial Times on Sunday.
The deal, which FT says could be signed as early as Sunday night, values Credit Suisse at around $7 billion less than its market value at Friday’s close.
The FT said UBS offered a price of 0.25 Swiss francs ($0.27) per share, payable in UBS shares. Credit Suisse shares closed at 1.86 Swiss francs on Friday. The fast pace of negotiations means that the terms of a final agreement may differ from those reported.
Credit Suisse declined to comment on the report when contacted by CNBC.
It comes after Credit Suisse shares posted their worst weekly decline since the coronavirus pandemic began, despite announcing it would access a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank .
It’s already grappled with a string 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.
The scope and potential impact of Credit Suisse on the global economy is much larger than that of US banks. At around CHF 530 billion at the end of 2022, the Swiss bank’s balance sheet is about twice as large as that of Lehman Brothers at the time of the collapse. It’s also much more globally connected, with multiple 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 said in its belated annual report earlier last week that outflows have yet to reverse. It reported a net loss of 7.3 billion Swiss francs for the full year in 2022 and expects another “significant” loss in 2023.
The bank previously announced a massive strategic overhaul to address these chronic issues, which will be taken over in July by current CEO and Credit Suisse veteran Ulrich Koerner.
This is an evolving story. Please check again for updates.