The Swiss bank UBS wants to take over industry peer Credit Suisse for a maximum of 930 million euros, a fraction of the value of the ailing company. That reports the British newspaper Financial Times (FT) Sunday. According to news agency Bloomberg Credit Suisse is not charmed by the offer, and gives the bank considerable headwind. The Swiss government wants to introduce a change in the law so that the takeover can take place without the consent of the shareholders. This bypasses a consultation period of six weeks and the takeover can take place as quickly as possible. The deal must be completed by Sunday evening, just before markets open again on Monday morning, he said FT.
Both banks still see bears on the road to a takeover, sources report FT. According to them, UBS is talking about the acquisition of the scandal-plagued investment bank of UBS, and is therefore demanding guarantees from the Swiss government. For Credit Suisse, the offer is too low; approximately one-eighth of the company’s value. If the deal goes through in this form, shareholders and employees who are entitled to payment of the share will be disadvantaged.
In published Tuesday Credit Suisse’s annual results revealed several accounting shortcomings. Accountant PwC gave a „negative advice” about the bank’s internal control systems. A day later, Credit Suisse’s main shareholder – the Saudi National Bank – also turned out to no longer want to provide financial support. As a result, Credit Suisse lost a quarter of its market value, after which the Swiss central bank announced that it would lend up to 50 billion Swiss francs (50.6 billion euros) to the bank in need.
Largest financial institution in Europe
The assistance of the Swiss state proved to be insufficient for shareholders and account holders; Credit Suisse shares plummeted another 8 percent on Friday. According to FT UBS, Credit Suisse and Swiss financial regulator Finma met on Saturday for an emergency meeting to finalize the merger agreement. With the merger, UBS and Credit Suisse will become the largest financial institution in Europe, with a combined balance sheet of more than EUR 1,500 billion. The Swiss banking union fears that the takeover will lead to large-scale job losses at Credit Suisse, which employs some 17,000 people. The union called on Sunday to set up a ‘task force’ to protect employees.
At the head of UBS is the former CEO of ING, the Dutchman Ralph Hamers. In that previous role, he was widely criticized for ING’s inadequate anti-money laundering policy under his reign, and is being prosecuted for his role. He was also discredited because of the high bonuses that ING wanted to pay him. Hamers, on the other hand, is causing a lot of furore as boss of UBS; Despite the turmoil in the financial markets since the Russian invasion of Ukraine, UBS is enjoying good times with a net profit of almost $7 billion in 2021 and a share that has risen in value by 76 percent since taking office. High bonuses are still inextricably linked to Hammers; for his earnings in 2022, he was paid a total of 12.7 million euros. That while his board colleagues lost 10 percent.
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