New twist in the banking crisis. With the market closed and with confirmed support from Switzerland, Credit Suisse and UBS are already negotiating for a formula to stop the bleeding of deposits around the bank. Among the options is on the table a full or partial purchase of the entity. This operation could be done in an accelerated manner due to the low market value of Credit Suisse after days of sharp falls, which has caused its total market capitalization to have fallen to only 8,000 million dollars.
Financial Times, who has advanced the news, quotes the Swiss regulators of FINMA that they affirm that the merger is plan A for get to save Credit Suisse, The problem would be on the UBS side, which is wary of the potential risks that this takeover would imply and wants a guarantee to take a step forward.
Credit Suisse has worn the cursed bank crown for three years. The Swiss entity not a financial puddle has been lost in recent years. The bank has been involved in a case of corporate espionage, has been fined for fraud and corruption in Mozambique, was present at the media explosion of the Archegos fund that left a good hole in the firm, and has suffered a judgment against money laundering. money from a cocaine dealer. All this has led to a spiral of continuous changes at the top and strategic plans.
The fall of Silicon Valley Bank led the bank to suffer a crisis of confidence that left it on the brink of bankruptcy. The Bank of Switzerland offered him a liquidity line of 50,000 million dollars just two days ago, but his problems are so serious that the feeling of the market was that was doomedand that his only two options were to sell or be dismembered and distributed among various entities.
In this sense, the sources of the FT point out that the objective of the Swiss regulators is that the sale is finished “before the markets open on Monday”. In any case, after learning the news, the shares have jumped in the ‘after-hours’ market from a double-digit decline to a slight rise of 3%, there is optimism, but still with caution, in case the operation does not finally come to fruition. port.
This same afternoon, sources of Bloomberg They explained that both UBS and Credit Suisse viewed a takeover as a last resort, given the considerable hurdles and overlaps of such a transaction. UBS had said it preferred focus on your own strategy independent, which was reluctant to take the risks associated with Credit Suisse, according to anonymous sources.
The entity has sunk 25% since the bankruptcy of Silicon Valley Bank
Credit Suisse has plunged 8% today on the stock market after live a 24% drop on Wednesday, when it came to light that its main investor, the Saudi Arabian fund, refused the option of expanding equity positions to ensure more liquidity in the face of an exodus of deposits. Since March 10, the day SVB’s liquidation was announced, the firm has fallen 25% and has fallen 74% in the last 12 months, afflicted by various crises.
Apart from the last stretch of panic in the banking sector, the different scandals that had occurred in the Swiss firm had led to a record deposit outflow in 2022 dand 124,800 million euros, in 40% of the total due, mainly, to a great flight of great fortunes. This situation left a hole in their accounts that resulted in losses of 7,400 million euros.
Therefore, the mistrust generated in this latest crisis comes as the last link in a perfect storm. Proof of the massive exodus that surrounded the historic bank is in its funds, which, according to Morningstar data, would have already suffered net outflows of more than 200 million dollars in its vehicles in the United States and Europe alone. It remains to be seen if a merger will mean the end of this bleeding or if this will only be a full stop in the banking crisis.
