Bloomberg: UBS seeks government support for Credit Suisse takeover

Bloomberg: UBS seeks government support for Credit Suisse takeover

Bloomberg: UBS seeks government support in case of takeover; Credit Suisse

Swiss bank Credit Suisse building in Zurich on November 23, 2022.

ZURICH – Swiss bank UBS is asking the Swiss government for support if it buys ailing rival Credit Suisse Suisse, Bloomberg reported. The two largest Swiss banks are negotiating separately over the weekend, with UBS interested in a partial or full takeover, according to the Financial Times (FT). Swiss regulators called for the merger of the banks. UBS and Credit Suisse declined to comment on the situation today. According to FT sources, the American company BlackRock also came with a competitive offer to take over Credit Suisse.

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UBS is now discussing possible scenarios in which, for example, the Swiss government would take over legal costs or other expenses in the event of a purchase, people familiar with the situation told Bloomberg. If the two banks merge, it would be the largest banking merger in Europe since the financial crisis of 2008.

The weekend talks are being organized by the Swiss National Bank and regulator Finma in the hope of boosting confidence in the country's financial sector. The Swiss National Bank wants to find a straightforward solution before markets open on Monday, FT sources say. According to the newspaper, however, this is not a guarantee that the agreement will be concluded.

US investment firm BlackRock, meanwhile, has drawn up a rival offer that would beat UBS's plan to take over Credit Suisse. Five people familiar with the matter told the FT. According to them, the American investment giant is evaluating various options, including offers to take over only some of the bank's activities. However, the firm said today that it is not interested in taking over Credit Suisse.

Credit Suisse announced this week that it will use the option to borrow up to 50 billion Swiss francs (CZK 1.2 trillion) from the Swiss central bank to boost liquidity . According to a Reuters analysis, however, this is only buying time and, for example, the American investment bank JPMorgan considers a takeover by UBS to be the most likely scenario. over the past two years, it has identified serious deficiencies.

The financial markets have also been under tension in recent days due to the collapse of the American financial institutions Silicon Valley Bank (SVB) and Signature Bank. The development prompted US President Joe Biden to call on Congress on Friday to allow regulators to crack down on executives at failed banks. He also expressed his belief that the banking crisis has calmed down.

However, according to Reuters, concerns about broader problems in the banking sector remain.