UBS agrees to buy Credit Suisse for more than $2 billion, Financial Times reports
UBS (UBSG.S) has agreed to buy Swiss banking giant Credit Suisse (CSGN.S) after increasing its offer to more than $2 billion, the Financial Times reported on Sunday, as authorities bid to stave off turmoil when the markets reopen.
Officials have been racing to rescue the 167-year-old bank, among the world’s largest wealth managers, after a brutal week that saw the second- and third-largest U.S. bank failures in history. As one of 30 global banks seen as systemically important, any deal for Credit Suisse could ripple through global financial markets.
At least two major banks in Europe are examining scenarios of contagion possibly spreading in the region’s banking sector and looking to the Federal Reserve and the European Central Bank to step in with stronger signals of support, two senior executives with knowledge of the discussions told Reuters.
A person with knowledge of the talks earlier told Reuters that UBS sought $6 billion from the Swiss government as part of a possible purchase of its rival. The guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges.
One source previously said the talks were encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combined. The Swiss Bank Employees Association on Sunday called for the immediate creation of a task force to deal with the risk to jobs.
Swiss broadcaster SRF and other media reported that the government would hold an “important” press conference later on Sunday. They did not give any more details.
Credit Suisse shares lost a quarter of their value last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined the confidence of investors and clients.
Related Galleries:
