UBS in talks to take over all or part of Credit Suisse as share prices fall – report

Swiss banking giant UBS is in discussions to take over all or part of Credit Suisse, it was reported late Friday, after a day in which the troubled banking giant continued to see its share price fall despite a $54bn cash injection on Thursday.

The Financial Times reported that the boards of the two banks are set to meet separately over the weekend in talks initiated by the Swiss National Bank, which provided Credit Suisse a lifeline, and regulator Swiss Finma.

The expected talks come as a senior Credit Suisse executive said wealth management clients were leaving the bank. A merger between UBS, valued at $56bn, and Credit Suisse, valued at $7bn, was “plan A” to arrest a collapse in confidence, the FT said, citing unnamed sources.

UBS was also reported to be analyzing the potential risks to its own business in taking on its Swiss counterpart.

Separately, Reuters reported that at least four major banks, including Societe Generale and Deutsche Bank, had imposed restrictions on new trades with Credit Suisse, adding to the bank’s problems. HSBC was also said to be scrutinizing loans linked to Credit Suisse securities.

Credit Suisse has said that it is a strong, global bank. “We fulfill and basically overshoot all regulatory requirements. Our capital, our liquidity basis is very strong,” chief executive Ulrich Koerner said earlier this week.

But Reuters reported that bankers and investors are now discussing scenarios in which Credit Suisse could sell or wind down some of its existing businesses or broken up.

Long-troubled Credit Suisse is the largest bank so far to be caught up in a growing banking crisis. On Friday Silicon Valley Bank’s parent company filed for bankruptcy after worried depositors pulled billions from their accounts. And on Thursday Wall Street’s biggest banks launched a rescue package for San Francisco-based First Republic, which had been hit by a similar wave of withdrawals.

That deal initially calmed nervous US investors but on Friday bank stocks slid again as fears grew that the crisis is escalating.