A customer walks towards an automatic teller machine (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 on Sunday offered to buy its struggling rival Credit Suisse for up to 1 billion dollars, according to the Financial Timesciting four people with direct knowledge of the situation.
The deal, which the FT said could be signed as early as Sunday evening, values Credit Suisse at about $7 billion less than its market value at Friday’s close.
The FT said UBS had offered a price of 0.25 Swiss francs ($0.27) per share to be paid in UBS stock. Credit Suisse shares closed Friday at 1.86 Swiss francs. The fast-paced nature of negotiations means that the terms of any final deal may differ from those reported.
Credit Suisse is said to have balked at the offer, but claims it is too low and would harm shareholders and employees, This is what people with knowledge of the matter say to Bloomberg.
Credit Suisse and UBS declined to comment on the reports when contacted by CNBC.
The UBS offer comes after Credit Suisse shares logged their worst weekly decline since the corona pandemic begandespite 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 fought one a series of losses and scandalsand last week sentiment was shaken again with the collapse of Silicon Valley Bank and the closing of Signature Bank in the US, sending shares sliding.
Credit Suisse’s scale and potential impact on the global economy is far greater than the US banks. The Swiss bank’s balance sheet is about twice the size of Lehman Brothers when it collapsed, around 530 billion Swiss francs by the end of 2022. It is also much more globally connected, with several international subsidiaries – making orderly management of Credit Suisse’s situation even more important .
Credit Suisse lost about 38% of its deposits in the fourth quarter of 2022, and disclosed in its delayed annual report at the beginning of last week that outflows have not yet reversed. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further “relevant” loss in 2023.
The bank had earlier announced a massive strategic review in a bid to tackle these chronic problems, with current CEO and Credit Suisse veteran Ulrich Koerner will take over in July.
This is an evolving story. Check back for updates.