UBS is in talks to take over all or part of Credit Suisse, and the boards of Switzerland’s two biggest lenders will meet separately at the weekend to consider Europe’s biggest banking merger since the financial crisis, according to several people briefed on the talks.
Switzerland’s central bank and regulator Finma are holding talks to try to boost confidence in the country’s banking sector, the people said. Their intervention came days after the central bank was forced to grant a 50 billion franc ($54 billion) emergency loan to Credit Suisse.
But that didn’t halt the slide in its share price, which has fallen to a record low after its biggest investor ruled out a capital increase and its chairman admitted the exodus of wealth management clients had continued.
UBS has a market capitalization of $56.6 billion, while Credit Suisse shares were worth $8 billion on Friday.
Swiss regulators told their US and British counterparts on Friday night that a merger of the two banks was their “plan A” to prevent a collapse of confidence in Credit Suisse, a person familiar with the discussions told the FT.
A number of different options are being discussed between the two banks, another person told the FT, who added that both sides are trying to assess regulatory constraints in different jurisdictions. This person added that UBS is also analyzing the potential risks the deal could have on its own business.
The central bank’s focus is to agree on a simple and clear solution before markets open on Monday, one of the people said. There is no guarantee that an agreement will be reached.
Credit Suisse declined to comment. UBS declined to comment, as did the Bank of England and the Federal Reserve. The Swiss National Bank did not respond to requests for comment.
This is a developing story. More to follow. . .