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Bern,Switzerland: Switzerland’s largest bank Union Bank of Switzerland has agreed to acquire its troubled rival Credit Suisse. Earlier this month, UBS has agreed to acquire Credit Suisse in an emergency deal following the failure of two US banks. UBS has announced the acquisition of Credit Suisse for $3.24 billion. Under this, the shareholders of Credit Suisse will get one share of UBS for every 22.48 shares held.
The central bank said, “This acquisition has been made possible with the support of the Swiss Federal Government, the Swiss Financial Market Supervisory Authority and the Swiss National Bank.”
The bank said it would ‘secure financial stability and protect the Swiss economy’.
According to The New York Post, the Swiss national bank and the country’s top regulator FINMA have told their international counterparts that they see the deal with UBS as the only option to prevent Credit Suisse from collapsing.
Credit Suisse (CS) had been losing the confidence of investors and customers over the years. In 2022, Credit Suisse recorded its worst loss since the global financial crisis. Fears about weak institutions spread after Silicon Valley Bank and Signature Bank admitted a ‘material weakness’ in their bookkeeping methodology last week, reports CNN, when rising interest rates eroded the value of some financial assets. was reduced.
Credit Suisse shares saw a 25 percent decline during the week. An emergency loan from the Swiss National Bank failed to halt the decline.
The global headquarters of UBS and Credit Suisse are just 300 yards apart in Zurich, but the fortunes of the banks have recently been very different from each other. UBS shares have gained 15 per cent in the past two years and have reported a profit of US$7.6 billion in 2022.
