Credit Suisse bank logo in Zurich on March 18, 2023.
Bern/Zurich – In a rescue operation, the largest Swiss bank UBS will take over its long-time rival Credit Suisse, whose problems have begun to threaten the financial system, for approximately three billion francs (CHF; almost CZK 73 billion). The banks announced this today at a joint press conference with representatives of the government, central bank and regulatory authorities. UBS will pay for a smaller competitor with its shares.
To strengthen liquidity, the Swiss central bank will provide up to 100 billion francs (CHF; 2.4 trillion CZK) as insurance. It is one of the largest transactions of its kind in the banking sector in decades, bringing together the two largest banks in Switzerland.
“With the takeover of Credit Suisse by UBS, we have found a solution that will ensure financial stability and protect the Swiss economy in this exceptional situation,” the central bank said.
Swiss President Alain Berset said that saving Credit Suisse so that it could survive help from another bank was no longer possible due to the loss of trust. According to the Ministry of Finance, the chosen solution is the least painful for the Swiss Confederation and for its taxpayers than another option.
UBS said it was too early to speculate on how many people would lose their jobs in the deal. Informed sources have so far said between 9,000 and 10,000 jobs could be lost.
Credit Suisse, which was founded in 1856, has paid the price for past management mistakes and scandals in its investment banking business. The tie was only broken by a confidence crisis this week, when clients began withdrawing deposits en masse.
Swiss authorities were scrambling to present a solution for Credit Suisse before it opens for trading on exchanges in Asia on Monday morning. There were fears that if the matter was not resolved by then, jitters would prevail in the markets and the major stock indexes would fall sharply. This would mean economic losses for individuals, companies and governments.
Credit Suisse is one of the largest asset managers in the world. It provides services primarily to wealthy individuals and is considered one of the thirty systemically important banks in the global financial architecture. Its rescue was therefore closely monitored by regulatory authorities in Britain, Germany, the United States and other large countries.