Struggling Swiss banking giant Credit Suisse has reportedly agreed to be bought by its arch-rival UBS at a discount to Friday’s close price, after seeing a wave of customer deposits exit the bank.
will buy Credit Suisse
for more than $2 billion in an all-stock deal, the Financial Times reported, citing people with direct knowledge of the transaction. Bloomberg News reported the same deal terms.
The 0.50 francs per share UBS is offering, in stock, compares to Credit Suisse’s
closing price of 1.86 francs on Friday. The FT said UBS initially bid just 0.25 francs per share.
Separately, The Wall Street Journal reported the Swiss National Bank offered UBS a roughly $100 billion liquidity to absorb Credit Suisse. That comes after SNB last week agreed to loan Credit Suisse 50 billion francs.
The Federal Reserve has been working with its Swiss counterpart on the deal, as both banks have major operations in the U.S.
Credit Suisse’s downfall occurred just days after the collapse of U.S. banks SVB Financial and Signature Bank. While Credit Suisse, as well as Swiss authorities, said they didn’t have the same kinds of problems, they also saw customers leave. After wealthy clients withdrew roughly $100 billion from Credit Suisse in the fourth quarter, they again began to see big outflows last week, the FT reported.
Credit Suisse has lost money for five consecutive quarters, reeling from losses to family office Archegos as well as having to freeze $10 billion of supply chain funds sold through the bank that were managed by Greensill Capital.