Switzerland is preparing to use emergency measures to speed up UBS’s takeover of Credit Suisse as banks and their regulators rush to hammer out a merger deal, the Financial Times said, citing two people familiar with the matter. with the situation.
Under Swiss rules, UBS must give its shareholders six weeks to consult on the acquisition, which would combine Switzerland’s two biggest lenders.
Two people familiar with the situation said UBS had indicated it would use extraordinary measures to be able to skip the consultation period. One of the people said details were still being worked out.
Swiss regulators and its finance ministry did not immediately respond to requests for comment. The Swiss central bank, Credit Suisse and UBS declined to comment, the publication said.
The Swiss National Bank and regulator Finma have told their international partners that they see the UBS deal as the only option to stop the collapse of confidence in Credit Suisse and are working to reach a regulatory agreement by Saturday evening.
According to two people familiar with the situation, the outflow of deposits from the bank reached 10 billion Swiss francs ($10.8 billion) a day late last week as concerns about its condition grew.
The boards of both banks will meet this weekend. Credit Suisse’s key regulators in the US, UK and Switzerland are reviewing the legal structure of the deal and several concessions that UBS has requested.
UBS wants to be allowed to phase in all the requirements that will be placed on it under global capital rules for the world’s biggest banks. In addition, UBS has requested some form of compensation or a government settlement to cover future legal costs, one of the sources told the publication.
The upcoming takeover reflects the sharp divergence in the fortunes of the two banks. Over the past three years, UBS’s shares have risen by around 120%, while those of its smaller rival have fallen by around 70%.
The former has a market capitalization of $56.6 billion, while Credit Suisse ended trading Friday at $8 billion. In 2022, UBS generated a profit of $7.6 billion, while Credit Suisse posted a loss of $7.9 billion, effectively erasing all of the previous decade’s profit.
A full merger between UBS and Credit Suisse would create one of Europe’s largest global systemically important financial institutions. The total value of assets on the UBS balance sheet is 1.1 trillion. dollars, and Credit Suisse – 575 billion dollars. However, such a large deal may be too complicated to pull off.
