UBS Rushed Deal to Take Over Troubled Credit Suisse
(20 March 2023 – Switzerland) UBS has agreed to terms with the Swiss National Bank (SNB) to acquire Credit Suisse after raising its offer to CHF$3 billion, a fraction of the over CHF$7 billion market cap of Credit Suisse as of last week
Swiss authorities will alter the country’s laws to bypass a shareholder vote as they rushed to announce a deal before Monday, averting disaster if the global systemically important bank (G-SIB) failed. The SNB will offer a CHF$100 billion liquidity line to UBS as part of the deal, according to two people familiar with the matter.
Deposit outflows from Credit Suisse topped CHF$10 billion a day last week and customers withdrew CHF$111 billion from the group in Q4 2022.
UBS will dramatically shrink Credit Suisse’s investment bank, so that the combined entity will make up no more than a third of the merged group, two of the people said.
“It was indispensable that we acted quickly and find a solution as quickly as possible given that Credit Suisse is a systemically important bank” SNB President Thomas Jordan commented.