UBS has started talks to take over all or part of Credit Suisse. In fact, as reported by the Reuters news agency, the two most important banking entities in the country will meet this weekend to seek the agreement, after the Swiss Central Bank injected 50,000 million francs to avoid a major crisis. .
The central bank injection, however, has failed to stem a plummeting share priceslumped after its biggest investor refused to provide it with more capital and its chairman admitted to customer flight in the wealth management business.
“The intervention of the Swiss Central Bank might not be enough“, points out the director of investment strategy at RBC Wealth Management, Frédérique Carrier. However, “it was a necessary step”, she continues. But the uncertainty surrounding the global banking sector continues, despite the efforts of both the ECB and the Federal Reserve, which has incurred losses throughout the day on Friday.
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In this situation, what the central bank wants is to find a simple and fast solution that gives air to the banking system before the markets open next Monday. Thus, the Swiss regulators have made it known to their US and UK counterparts that this merger is their first option to cut the mistrust generated towards Credit Suisse.
If this purchase were to take place, the sum of both institutions would give rise to an entity with a business volume of 1.4 trillion euros. UBS is valued at $55 billion and Credit Suisse is currently down to $8 billion. The banking entity born from the merger would have a size similar to that of Grupo Santander. And he would occupy, in this way, the fifth or sixth position in the European ranking.