UBS is in talks to acquire all or part of Credit Suisse, with the boards of directors of Switzerland’s two largest lenders meeting separately this weekend to consider Europe’s most sweeping banking combination since the financial crisis, according to multiple people talking about the conversations were recorded.
The Swiss National Bank and regulator Finma are orchestrating the talks in an effort to bolster confidence in the country’s banking sector, the people said. Their intervention comes days after the central bank was forced to provide Credit Suisse with an emergency loan of SFr 50 billion ($54 billion).
However, this failed to halt a fall in the share price, which fell to an all-time low after the largest investor ruled out raising capital and the chairman admitted that the exodus of asset management clients continued.
UBS has a market capitalization of $56.6 billion, while shares in Credit Suisse closed Friday at $8 billion.
Swiss regulators told their US and UK counterparts Friday night that merging the two banks was their “plan A” to halt a collapse in confidence in Credit Suisse, a person familiar with those discussions told the FT.
A number of different options are being discussed between the two banks, another person told the FT, adding that both parties are trying to evaluate regulatory restrictions in different jurisdictions. This person added that UBS is also analyzing the possible risks a deal could have for its own company.
The central bank’s focus is to agree on a simple and straightforward solution before markets open Monday, one of the people said. There is no guarantee that a deal will be made.
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 an evolving story. More to follow. . .