A customer walks to an automated teller machine (ATM) at a Credit Suisse Group AG bank branch in Geneva, Switzerland, on Thursday, September 1, 2022.
Jose Cendón | Bloomberg | Getty Images
Swiss banking giant UBS on Sunday he offered to buy out his fighting rival Credit Suisse up to 1 billion dollars, according to the Financial Timesciting four people with direct knowledge of the situation.
The deal, which the FT said could be signed as early as Sunday evening, values Credit Suisse at about $7 billion less than its market value at Friday’s close.
The FT said UBS offered a price of 0.25 Swiss francs ($0.27) per share, to be paid in UBS shares. Credit Suisse shares closed at 1.86 Swiss francs on Friday. The fast-paced nature of negotiations means that the terms of any final deal may differ from those that have been reported.
Credit Suisse is reportedly resisting the offer, saying it is too low and would harm shareholders and employees, people with knowledge of the matter told Bloomberg.
Credit Suisse declined to comment on the reports when contacted by CNBC.
UBS’s offer comes after Credit Suisse’s shares saw theirs the worst weekly decline since the outbreak of the coronavirus pandemicdespite announcing that it would have access to a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.
There was already a fight a series of losses and scandalsand sentiment was rocked again last week by the collapse of Silicon Valley Bank and the closing of Signature Bank in the US, sending shares down.
Credit Suisse’s scale and potential impact on the global economy is far greater than that of US banks. The Swiss bank’s balance sheet is roughly twice that of Lehman Brothers when it collapsed, at around 530 billion Swiss francs at the end of 2022. It is also much more globally connected with many international subsidiaries, which makes proper management of Credit Suisse’s situation even more important.
Credit Suisse lost around 38% of its deposits in the fourth quarter of 2022 and disclosed in its delayed annual report early last week that the tides have yet to turn. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects another “substantial” loss in 2023.
The bank has previously announced a massive strategic overhaul in an effort to address these chronic issues current CEO and veteran Credit Suisse Ulrich Koerner took over in July.
This is a developing story. Please check for updates.