Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Biggest Swiss Bank UBS Agrees To Buy Crisis-Hit Credit Suisse In Historic Deal

Biggest Swiss Bank UBS Agrees To Buy Crisis-Hit Credit Suisse In Historic Deal

The move was welcomed in Washington, Brussels and London as one that would support financial stability.

UBS will take over its troubled Swiss rival Credit Suisse for $3.25 billion following crunch talks Sunday aimed at stopping the stricken bank from triggering a wider international banking crisis.

The government said the deal involving Switzerland's biggest bank taking over the second-largest, was vital to prevent irreparable economic turmoil spreading throughout the country and beyond.

The move was welcomed in Washington, Brussels and London as one that would support financial stability.

After a dramatic day of talks at the finance ministry in the capital Bern -- and with the clock ticking ahead of the markets opening on Monday in Asia and then in Europe -- the takeover details were announced at a press conference.

Swiss President Alain Berset was flanked by UBS chairman Colm Kelleher and his Credit Suisse counterpart Axel Lehmann, along with the Swiss finance minister and the heads of the Swiss National Bank (SNB) central bank and the financial regulator FINMA.

The wealthy Alpine nation is famed for its banking prominence and Berset said the takeover was the "best solution for restoring the confidence that has been lacking in the financial markets recently".

If Credit Suisse went into freefall, it would have had "incalculable consequences for the country and for international financial stability", he said.

Credit Suisse said in a statement that UBS would take it over for "a merger consideration of three billion Swiss francs ($3.25 billion)", with Credit Suisse shareholders receiving one UBS share for 22.48 Credit Suisse shares.

"Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome," Lehmann said.

'Huge collateral damage' risk


Finance Minister Karin Keller-Sutter said that bankruptcy for Credit Suisse could have caused "irreparable economic turmoil" and "huge collateral damage" for the Swiss financial market, not to mention the "risk of contagion" for other banks, including UBS itself.

The takeover has "laid the foundation for greater stability both in Switzerland and internationally", she said.

The deal was warmly received internationally, with European Central Bank chief Christine Lagarde welcoming the "swift action".

The decisions taken in Bern "are instrumental for restoring orderly market conditions and ensuring financial stability. The euro area banking sector is resilient, with strong capital and liquidity positions", she said.

Fed chair Jerome Powell and Treasury Secretary Janet Yellen said in a joint statement: "We welcome the announcements by the Swiss authorities today to support financial stability."

Britain too said the deal would "support financial stability".

Keller-Sutter said her US and British colleagues "really feared that there could be a bankruptcy of Credit Suisse, with all the losses".

The SNB announced that 100 billion Swiss francs of liquidity would be available.

Keller-Sutter insisted the deal was "a commercial solution and not a bailout."

UBS chairman Kelleher added: "We are committed to making this deal a great success.

"This is absolutely essential to the financial structure of Switzerland.

"UBS will remain rock solid," he insisted.

Too big to fail?


Like UBS, Credit Suisse was one of 30 banks around the world deemed to be Global Systemically Important Banks -- of such importance to the international banking system that they are considered too big to fail.

But the market movement seemed to suggest the bank was being perceived as a weak link in the chain.

Amid fears of contagion after the collapse of two US banks, Credit Suisse's share price had plunged by more than 30 percent on Wednesday to a new record low of 1.55 Swiss francs. That saw the SNB step in overnight with a $54-billion lifeline.

After recovering some ground Thursday, its shares closed down eight percent on Friday at 1.86 Swiss francs as the Zurich-based lender struggled to retain investor confidence.

In 2022, the bank suffered a net loss of $7.9 billion and expects a "substantial" pre-tax loss this year.

A UBS statement said Credit Suisse shareholders would get 0.76 Swiss francs per share.

After suffering heavy falls on the stock market last week, Credit Suisse's share price closed Friday at 1.86 Swiss francs, with the bank worth just over $8.7 billion.

Credit Suisse's share price has tumbled from 12.78 Swiss francs in February 2021 due to a string of scandals that it has been unable to shake off.

The Swiss Bank Employees Association said there was "a great deal at stake" for the 17,000 Credit Suisse staff, "and therefore also for our economy".

In addition, tens of thousands of jobs outside of the banking industry were potentially be at risk, it added.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×