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London (CNN) Switzerland’s largest bank, UBS, is buying ailing rival Credit Suisse in a bailout deal aimed at stemming the panic in financial markets unleashed by the collapse of two US banks earlier this month. agreed.
“UBS today announced the acquisition of Credit Suisse,” the Swiss National Bank said in a statement. added.
He said the rescue would “ensure financial stability and protect the Swiss economy”.
UBS has paid 3 billion Swiss francs ($3.25 billion) to Credit Suisse. Credit Suisse shareholders have been largely wiped out, receiving only one UBS share for every 22.5 Credit Suisse shares they hold. Unusually, the transaction does not require shareholder approval after the Swiss government agreed to change the law so that it could be completed quickly.
swiss credit (CS) Over the years, it has lost the confidence of investors and customers. 2022 will see the worst losses since the global financial crisis. But fears over fragile institutions last week, after acknowledging “significant weaknesses” in bookkeeping, and when the collapse of Silicon Valley and signature banks hurt the value of some financial assets as interest rates soared. Trust has collapsed because of the spread of
The 167-year-old bank’s share price fell 25% in a week, money flowed in from investment funds it managed, and at one point account holders were withdrawing more than $10 billion a day, he said. Financial Times reported. An emergency loan from the Swiss National Bank failed to stop the bleeding.
Swiss officials, who had pressed for private sector bailouts with limited government assistance to prevent a meltdown spreading across the global financial system on Monday, have reportedly gone to plan B (full or partial). nationalization) was being considered.
The emergency acquisition was agreed after several days of intense negotiations involving financial regulators in Switzerland, the US and the UK. UBSMore (UBSMore) Credit Suisse ranks among the 30 most important banks in the global financial system, with combined assets of approximately $1.7 trillion.
“Given the recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome,” said Credit Suisse Chairman Axel Lehmann in a statement.
“This has been a very difficult time for Credit Suisse, and the team has worked tirelessly to address many key legacy issues and implement new strategies, but today we have enduring results. We are forced to arrive at a solution that brings
The global headquarters of UBS and Credit Suisse are just 300 yards away in Zurich, but the bank’s fortunes have taken very different paths lately. UBS’s stock has risen 15% over the past two years, and in 2022 he will post a profit of $7.6 billion. The stock market value was around $65 billion on Friday, according to Refinitiv.
Credit Suisse shares lost 84% of their value over the same period, posting a loss of $7.9 billion last year. At the end of last week, it was worth just $8 billion.
Dating back to 1856, Credit Suisse has its roots in Schweizerische Kreditanstalt (SKA), which was founded to finance the expansion and industrialization of the Swiss rail network.
In addition to being Switzerland’s second largest bank, it manages the wealth of many of the world’s wealthiest individuals and provides global investment banking services. At the end of 2022, it had over 50,000 employees, 17,000 of whom were based in Switzerland.
The Swiss National Bank has announced it will provide 100 billion Swiss francs ($108 billion) in loans to UBS and Credit Suisse to boost liquidity.
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