UBS In Talks To Acquire Credit Suisse

After its smaller rival was battered by a confidence crisis, Swiss regulators urged UBS Group AG to consider acquiring all or parts of Credit Suisse Group AG.

Swiss officials are pressuring UBS to consider how it might be involved in a solution for Credit Suisse. The talks are still ongoing, and it’s unclear whether a deal will be reached, according to the sources.

To discuss additional ways to stabilize Credit Suisse, the government, central bank, and Finma have been in close contact. People familiar with the matter previously stated that ideas floated included the separation of the bank’s Swiss unit and an orchestrated tie-up with UBS. According to sources close to the matter earlier this week, Credit Suisse and UBS executives had opposed such a pre-arranged pairing.

UBS would prefer to concentrate on its own wealth-centric independent strategy and is hesitant to take on risks associated with Credit Suisse. After being awarded the $54 billion credit line from the central bank, Credit Suisse is reportedly looking for more time to complete its turnaround.

Credit Suisse’s market value has fallen from more than 100 billion Swiss francs in 2007 to around 7.4 billion Swiss francs ($8 billion). The market value for UBS is 60 billion Swiss francs.

Credit Suisse, which was founded in 1856, has been battered in recent years by a string of scandals, blowups, leadership changes, and legal issues. The company’s 7.3 billion franc loss last year erased a decade’s worth of profits.

Clients withdrew more than $100 billion in assets in the last three months of last year as concerns about its financial health grew, and the outflows have continued even after it raised 4 billion Swiss francs from shareholders.