(CNN) — Switzerland’s biggest bank, UBS, has agreed to buy its ailing rival Credit Suisse in an emergency rescue deal aimed at ending the panic in financial markets triggered by the collapse of two U.S. banks earlier this month. UBS today announced the takeover of Credit. Suisse,” the Swiss National Bank said in a statement. It said the bailout would “ensure financial stability and protect the Swiss economy.” UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse, about 60% less than what the bank was worth at the close of markets on Friday. Credit Suisse shareholders will be largely wiped out, receiving the equivalent of just 0.76 Swiss francs in UBS shares for shares that traded at 1.86 Swiss francs on Friday. Ironically, the deal will not require shareholder approval after the Swiss government agreed to replace Credit Suisse, which has lost the trust of investors and clients for years. In 2022, it posted its worst loss since the global financial crisis. But confidence collapsed last week after he acknowledged a “material weakness” in his books and as the demise of Silicon Valley Bank and Signature Bank spread fears about weak institutions at a time when a sharp rise in interest rates has undermined the value of some financial assets. Shares in the 167-year-old bank fell 25% in a week, as money poured out of the investment funds it manages, and at one point account holders were withdrawing deposits worth more than $10 billion a day, the Financial Times reported. An emergency loan of nearly $54 billion from the Swiss National Bank failed to stem the bleeding. But she had “built a bridge” by the weekend so that the rescue could be put together, Swiss officials said on Sunday night. “This acquisition is attractive.” for UBS shareholders, but let’s be clear, as far as Credit Suisse is concerned, this is an extraordinary rescue,” UBS Chairman Colm Kelleher told reporters. “This is absolutely important for the Swiss financial structure and … for global finance,” he told reporters. Desperate to prevent the collapse of the global financial system from spreading on Monday, Swiss authorities began searching for a private-sector solution with limited public support, while reportedly considering Plan B — full or partial nationalization. Given the recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome,” Credit Suisse Chairman Axel Lehmann said in a statement. “This has been an extremely challenging task. It’s a long time for Credit Suisse, and while the team has worked tirelessly to address many of the important issues with the legacy and execution of the new strategy, we are forced today to find a solution that delivers a sustainable outcome. negotiations involving financial regulators in Switzerland, the United States and Great Britain. UBS and Credit Suisse are among the 30 most important banks in the global financial system, and together they have almost $1.7 trillion in assets. Regulators welcome the takeover. Financial market regulators around the world welcomed UBS’s takeover of Credit Suisse. The US government said it supported the action and was working closely with the Swiss Central Bank to help with the takeover. “We welcome the Swiss authorities’ announcements today to support financial stability,” US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell said in a joint statement. . “The capital and liquidity of the U.S. banking system are strong, and the U.S. financial system is resilient.” Christine Lagarde, president of the European Central Bank, said the banking sector remains resilient, but the ECB is ready to help banks. maintain sufficient cash to fund its operations should the need arise. “I welcome the quick actions and decisions taken by the Swiss authorities,” Lagarde said. “They are important for restoring orderly market conditions and ensuring financial stability. The Bank of England said it welcomed the measures taken by the Swiss authorities “to support financial stability”. “We have engaged closely with our international partners in preparation for today’s announcements and will continue to support their implementation,” the statement said. “The UK banking system is well capitalized and funded and remains sound and secure.” match? The global headquarters of UBS and Credit Suisse are just 300 yards from each other in Zurich, but the banks’ fortunes have taken very different paths recently. UBS shares have risen 15% over the past two years and are on track for 2022 earnings of 7 .6 billion.The stock market is worth about $65 billion on Friday, according to Refinitiv.Shares of Credit Suisse have lost 84% of their value over the same period and lost $7.9 billion last year.only $8 billion on end of last week Credit Suisse, which dates back to 1856, traces its origins to the Schweizerische Kreditanstalt (SKA), which was created to finance the expansion of the railway network and the industrialization of Switzerland Tsars. the second largest bank, it looks after the wealth of many of the world’s richest people and offers global investment banking services. At the end of 2022, it had more than 50,000 employees, 17,000 of them in Switzerland. The Swiss National Bank said it would provide a 100 billion Swiss franc ($108 billion) loan to UBS and Credit Suisse to boost liquidity. UBS chief executive Ralf Hammers will be CEO of the combined bank, while Kelleher will be chairman of the board. The takeover will strengthen UBS’s position as the world’s leading wealth manager with $5 trillion in invested assets and boost its ambitions for growth in the Americas and Asia. UBS said it expects to save $8 billion a year in costs by 2027. Investment bank Credit Suisse is in the crosshairs. “Let me be clear. UBS intends to shrink Credit Suisse’s investment banking business and align it with our conservative risk culture,” Kelleher said. The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Company. Discovery. All rights reserved.
(CNN) — The largest Swiss bank UBS agreed to buy it ailing competitor Credit Suisse in an emergency rescue deal aimed at stemming the panic in financial markets unleashed by the collapse of two US banks earlier this month.
“Today, UBS announced the takeover of Credit Suisse,” the Swiss National Bank said in a statement. It said the bailout would “ensure financial stability and protect the Swiss economy.”
UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse, about 60% less than what the bank was worth at the close of markets on Friday. Credit Suisse shareholders will be largely wiped out, receiving the equivalent of just 0.76 Swiss francs in UBS shares for shares that traded at 1.86 Swiss francs on Friday.
The emergency deal will not need shareholder approval after the Swiss government agreed to change the law to remove any uncertainty about the deal.
Credit Suisse has lost the trust of investors and clients over the years. In 2022, it posted its worst loss since the global financial crisis. But confidence collapsed last week after it admitted a “material weakness” in its accounting and as the demise of Silicon Valley Bank and Signature Bank spread fears about weak institutions at a time when a sharp rise in interest rates has eroded the value of some financial assets.
Shares in the 167-year-old bank fell 25% in a week, money poured out of the investment funds it manages, and at one point account holders were withdrawing deposits worth more than $10 billion a day, the Financial Times reported. An emergency loan of nearly $54 billion from the Swiss National Bank failed to stem the bleeding.
But Swiss officials said on Sunday night it had “built a bridge” to the weekend for the rescue to be put together.
“This acquisition is attractive to UBS shareholders, but let’s be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” UBS chairman Colm Kelleher told reporters.
“This is absolutely important for the financial structure of Switzerland and … for global finance,” he told reporters.
Desperate to prevent a collapse in the global financial system from spreading, Swiss authorities on Monday began looking for a solution for the private sector with limited government support, while considering Plan B — full or partial nationalization.
“Given the recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome,” Credit Suisse Chairman Axel Lehmann said in a statement.
“This has been an extremely challenging time for Credit Suisse, and while the team has worked tirelessly to address many important legacy challenges and deliver on our new strategy, we are challenged today to find a solution that delivers a lasting outcome.”
The emergency takeover was agreed after days of frantic negotiations involving the financial regulators of Switzerland, the United States and Britain. UBS and Credit Suisse are among the 30 most important banks in the global financial system, and together they hold nearly US$1.7 trillion.
Regulators welcome the takeover
Financial market regulators around the world have backed UBS’s takeover of Credit Suisse.
US authorities said they supported the action and were working closely with the Swiss Central Bank to help with the takeover.
“We welcome today’s announcement by the Swiss authorities to support financial stability,” US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell said in a joint statement. “The capital and liquidity of the US banking system are strong, and the US financial system is sound.”
Christine Lagarde, president of the European Central Bank, said the banking sector remains resilient, but the ECB stands ready to help banks maintain sufficient cash to fund their operations if needed.
“I welcome the quick actions and decisions taken by the Swiss authorities,” Lagarde said. “They are important for restoring orderly market conditions and ensuring financial stability.
The Bank of England said it welcomed the measures taken by the Swiss authorities “to support financial stability”.
“We have worked closely with international partners throughout the preparation for today’s announcements and will continue to support their implementation,” the statement said. “The UK banking system is well capitalized and funded and remains intact and sound.”
How UBS and Credit Suisse will match
The global headquarters of UBS and Credit Suisse are just 300 yards from each other in Zurich, but the banks’ fortunes have recently followed very different paths. UBS shares are up 15% over the past two years, and it’s on track to generate $7.6 billion in revenue in 2022. Its stock value was about $65 billion on Friday, according to Refinitiv.
Shares in Credit Suisse have lost 84% of their value over the same period, and last year it posted a loss of $7.9 billion. At the end of last week, it was worth just $8 billion.
Founded in 1856, Credit Suisse traces its origins to the Schweizerische Kreditanstalt (SKA), which was created to finance the expansion of the railway network and the industrialization of Switzerland.
As well as being Switzerland’s second largest bank, it looks after the wealth of many of the world’s richest people and offers global investment banking services. At the end of 2022, it had more than 50,000 employees, 17,000 of them in Switzerland.
The Swiss National Bank said it would provide a 100 billion Swiss franc ($108 billion) loan to UBS and Credit Suisse to boost liquidity.
UBS chief executive Ralf Hammers will be CEO of the combined bank, while Kelleher will be chairman of the board.
The takeover will strengthen UBS’s position as the world’s leading wealth manager with $5 trillion in invested assets and boost its ambitions for growth in the Americas and Asia. UBS said it expects to save $8 billion a year by 2027. Investment bank Credit Suisse is in the crosshairs.
“Let me be clear. UBS intends to shrink Credit Suisse’s investment banking business and align it with our conservative risk culture,” Kelleher said.
The-CNN-Wire™ & © 2023 Cable News Network, Inc., a Warner Bros. Company. Discovery. All rights reserved.
UBS buys Credit Suisse to end banking crisis
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