After a weekend of intense negotiations, there is already a deal. Swiss bank UBS he accepted to buy Credit Suisse costs just over $2,000 million (equivalent to €1,860 million), which is a time-honored ploy to prevent both the collapse of the establishment and a major banking crisis.
As Reuters news agency reported, UBS 0.50 Swiss francs per share, This is far below the book prices, which were 1.86 francs at the end of the day on Friday. However, UBS’s initial bid, announced on Saturday, was significantly lower: the bank offered just over $1,000m (around €930m).
For their part, country officials legislative change To speed up the process before Monday. In addition, the Swiss National Bank has agreed to provide a $100 billion liquidity loan to Credit Suisse as part of the deal. They do this because they are in a hurry to reach an agreement as soon as possible and thus prevent the panic from spreading further in the banking sector.
Amendment to the legislation will allow the purchase to be resolved without the need for a shareholder vote its asset to recover from the crisis it has fallen into in recent days, marked by investor panic and only temporarily buffered by the Swiss National Bank’s liquidity injection.
a complex operation
On Saturday, the North American giant Black Rock He would make an offer for the bank, which was eventually rejected. Given the complexity and urgency of the matter, the Swiss authorities assured that they would consider the full or partial nationalization of Credit Suisse if the deal did not materialise.
UBS will also ask the Government to bear certain legal costs and possible future losses. UBS also agreed to a softening material adverse change clause If credit default margins increase it would void the deal.
Fifth or sixth European bank
Enabling purchasing efficiency will result in a business volume of 1.4 trillion Euros from the sum of both institutions. UBS has a market cap of 55,000 million and Credit Suisse is currently down to 8,000 million.. The banking entity resulting from the merger will have a similar size to that of Grupo Santander.
Takes up space with this size Ranked fifth or sixth in the European rankings. However, some analysts warn that the Swiss competition authority may be skeptical of this merger “given its dominant position in the market” and thus pose an obstacle to its success.
Credit Suisse intervention
All this comes after the central bank’s injection, which has not been able to prevent the share price from falling. Its value plummeted after its biggest investor refused to provide it with more capital and its president accepted a client flight in his wealth management business.
The European Central Bank also failed to calm the waters after the crisis. Credit Suisse and americans Silicon Valley Bank (SVB), Signature Bank And First Republic Bank, ruled out a banking storm among eurozone institutions. And morale is not improving in the United States. There, the market fears that these liquidity aids will not be enough to save the banking system, and a full-fledged rescue of the affected institutions or private intervention is not out of the question. Uncertainty surrounding the global banking sector remains, despite efforts by the ECB and Federal Reserve, which meant losses throughout the day on Friday.
scandals and losses
Some analysts attribute part of this crisis to the scandals of recent years involving bribery and espionage at the bank, which largely concern its executives. All this, in 2022 – the president’s Antonio Horta-Osorio had to resign – the business lost 7,300 million Swiss francs due to large withdrawals from customers. And it had lost 1,650 million francs (1.67 million euros) the year before.
Against this background, Credit Suisse presented a massive restructuring plan at the end of October, which included: Remove 9,000 jobs by 2025representing 17% of their troops. With a workforce of 52,000 people at the end of October, the AFP agency explains that it wants to focus on more stable operations and radically transform its commercial banking. Although it slowed the decline slightly in the last quarter of last year, the business expected losses to return stronger this year.
25 years in Spain
Through its subsidiary, Credit Suisse has been operating in Spain for over 25 years. Credit Suisse Securities Incorporated (CSSSV), based in Madrid. The company has 151 employees in a country it sees as a “key” in the development of private banking in Europe. It has branches in Madrid, Barcelona and Valencia and according to industry sources its assets managed in private banking reach 10,000 million.
But his career in Spain has also been a circuitous one. The company experienced a major leak in the management staff it headed. first seagullDespite being associated with the Swiss establishment for 20 years, he left his post for a year and a half to move to Deutsche Bank, responsible for Credit Suisse International Wealth Management in Iberia.