After a weekend of intense negotiations, a deal has emerged. UBS agreed to acquire Credit Suisse for just over $2,000 million (roughly €1,860 million) in a move seen as a time-tested measure to avert a broader collapse and the risk of a major banking crisis.
Reuters reported that UBS offered 0.50 Swiss francs per share, well below the book value which stood at 1.86 francs at the close on Friday. UBS’s initial bid, announced on Saturday, was even lower, topping just over $1,000 million (around €930 million).
Swiss authorities moved quickly to speed up the process before Monday and the Swiss National Bank agreed to provide a liquidity loan of $100 billion to Credit Suisse as part of the arrangement. The goal was to secure a timely agreement and prevent panic from spreading further through the banking sector.
Legislation was amended to allow the purchase to proceed without a shareholder vote, enabling recovery from the crisis that had intensified in recent days and was only temporarily cushioned by the SNB’s liquidity support.
a complex operation
On Saturday, the North American asset manager BlackRock submitted an offer for the bank, which was ultimately rejected. Given the scale and urgency of the situation, Swiss authorities signaled they could consider full or partial nationalization if the deal did not materialize.
UBS also asked the government to shoulder certain legal costs and potential future losses. The parties agreed to a softening material adverse change clause, meaning if credit default margins rise, the deal could be voided.
Fifth or sixth European bank
Streamlining the purchase would create a combined business with a value approaching 1.4 trillion euros from both entities. UBS carries a market capitalization around €55 billion while Credit Suisse has fallen to about €8 billion. The merged entity would rank among the largest in Europe, resembling the size of major groups like Santander.
Industry observers place the new entity around fifth or sixth in European rankings. However, some analysts warn that European competition authorities may scrutinize the merger closely due to its potential market dominance and could pose hurdles to final approval.
Credit Suisse intervention
All of this follows a central bank intervention that could not fully stop the slide in Credit Suisse’s stock. The share price sagged after its largest investor declined to provide additional capital and a shift in client flows affected its wealth management franchise.
The European Central Bank also faced pressure as concerns about liquidity rippled through markets. While European institutions and major US lenders reassured stakeholders that a broader crisis was unlikely, market nerves persisted. The Fed and the ECB pursued liquidity measures, but investor sentiment remained cautious on both sides of the Atlantic.
scandals and losses
Analysts point to a string of scandals from recent years that have damaged Credit Suisse’s reputation, including governance issues and inquiries into bribery and espionage involving some executives. In 2022, the bank faced a leadership shakeup as the president resigned, and the institution posted significant outflows and losses in prior years. A sweeping restructuring was announced, targeting substantial reductions in staff and a sharper pivot toward stable, core operations within private and corporate banking. While the last quarter offered some relief, the path ahead remained uncertain for the bank’s profitability.
As part of the plan, the group aimed to cut thousands of jobs by 2025 and refocus its business on more robust areas. With tens of thousands of employees worldwide, the bank signaled a strategic shift toward more stable activities while preparing for possible future challenges in a volatile global market environment.
25 years in Spain
Credit Suisse has operated in Spain for more than a quarter of a century through its Madrid-based subsidiary, Credit Suisse Securities Incorporated (CSSSV). The firm employs hundreds in Spain and maintains offices in Madrid, Barcelona, and Valencia, with private banking assets managed locally reaching into the billions. The Spanish arm has faced leadership changes and shifts in strategy, reflecting the broader global transitions underway at the bank as it navigates regulatory scrutiny and market pressures.
Despite its long presence, the era has featured turnover in management and evolving roles within private banking for the Iberian market. The firm’s time in Spain has been marked by adaptation, collaboration with local partners, and ongoing efforts to grow private banking services in a highly competitive European environment.