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UBS has offered to buy Credit Suisse for up to $1 billion, reports the Financial Times

UBS has offered to buy Credit Suisse for up to  billion, reports the Financial Times
  • The UBS sale, which may be signed this evening, values ​​Credit Suisse at about $7 billion below its market value at Friday’s close.
  • This comes after Credit Suisse shares posted their worst weekly decline since the onset of the coronavirus pandemic.
  • This is despite announcing a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss Central Bank.

A customer walks toward an automated teller machine (ATM) inside a Credit Suisse Group AG bank branch in Geneva, Switzerland, on Thursday, September 1, 2022.

Jose Sindon | bloomberg | Getty Images

Swiss banking giant UBS on Sunday offered to buy rival Credit Suisse for up to $1 billion. According to the Financial Timesciting four people with direct knowledge of the situation.

The deal, which the Financial Times said could be signed on Sunday evening, values ​​Credit Suisse at about $7 billion below its market value at Friday’s close.

The Financial Times said UBS offered a price of 0.25 Swiss francs ($0.27) per share to be paid in UBS shares. Credit Suisse shares closed on Friday at 1.86 Swiss francs. The fast-moving nature of the negotiations means that the terms of any final deal may be different from those stated.

Credit Suisse is said to reject the offer, however, arguing that it is too low and would hurt shareholders and employees, People familiar with the matter told Bloomberg.

Credit Suisse declined to comment on the reports when contacted by CNBC.

UBS’ offer comes after Credit Suisse shares posted their worst weekly decline since the start of the coronavirus pandemic, despite announcing that it had secured a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss Central Bank.

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It was already battling a string of losses and scandals, and sentiment was rocked last week again with the collapse of Silicon Valley Bank and the closure of Signature Bank in the US, sending stocks tumbling.

Credit Suisse’s size and potential impact on the global economy is much greater than that of US banks. The Swiss bank’s balance sheet was twice the size of Lehman Brothers when it collapsed, at around CHF530 billion by the end of 2022. It is also more globally connected, with many international subsidiaries – making the orderly management of Credit Suisse’s position all the more important.

Credit Suisse lost about 38% of its deposits in the last quarter of 2022, and revealed in its late annual report early last week that outflows have not yet reversed. It reported a full-year net loss of CHF7.3 billion for 2022 and expects more “significant” losses in 2023.

The bank had previously announced a massive strategic overhaul in a bid to tackle these chronic problems, with current CEO and Credit Suisse veteran Ulrich Koerner taking charge in July.

This is a developing story. . Please check back for updates