March 31, 2023

The Swiss bank UBS on Sunday, March 19 acquired another Swiss bank Credit Suisse for 3 billion francs, the country’s National Bank said. The merger of the two largest and oldest credit institutions in Switzerland took place with the support of the country’s authorities. Swiss regulators were forced to intervene and arrange a deal to prevent the crisis of confidence from Credit Suisse from spreading to the financial system as a whole. The merger is expected to be finalized by the end of 2023. The transaction took place on the terms of 0.76 Swiss francs per share of Credit Suisse, according to a statement from UBS.

The authorities have provided both banks with a CHF100bn liquidity guarantee in addition to a CHF50bn loan, Swiss President Alain Berset said at a press conference in Berne. “This is the best solution to provide confidence in the financial system” of Switzerland, he added. As reported at a press conference, the merger was approved by the Swiss financial regulator FINMA.

Crisis of confidence at Credit Suisse

Credit Suisse problemswhich have been going on for more than a year, have become aggravated during the banking crisis. On March 15, the bank experienced the largest drop in shares in its history – by 30 percent. As the Financial Times newspaper wrote, citing sources, amid fears for the financial position of the bank, the outflow of deposits from it exceeded 10 billion francs per day.

After that, negotiations began to save the bank, Swiss Finance Minister Karin Keller-Sutter said at a press conference today. “The default of a systemically important bank would have unpredictable consequences both in Switzerland and abroad,” she stressed.

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