UBS and regulators rush to close Credit Suisse takeover deal, possibly by Sunday: reports

Regulators have proposed ditching the usual shareholder vote to expedite the sale, one source said. Discussions were quick, and the remaining sticking point was the status of who would own Credit Suisse’s sizable Swiss retail arm, reports said.

The Swiss National Bank and regulator Finma have told international partners that they see the deal with UBS as the only way to stem the decline in confidence in Credit Suisse CSGN.
-8.01%

KS,
-6.94%.
According to the report, the outflow of deposits from the bank exceeded 10 billion Swiss francs. francs ($10.8 billion) a day late last week as fears for his health intensified.

The boards of directors of the two banks are meeting this weekend. Key Credit Suisse regulators in the US, UK and Switzerland are reviewing the legal structure of the deal and several concessions that UBS UBSG,
-1.16%

UBS,
-5.50%
searched.

UBS wants to be allowed to phase in whatever requirements it faces under global capital rules for the world’s largest banks. In addition, UBS has requested some form of damages or a government agreement to cover future legal costs, one of the sources said.

UBS, Credit Suisse, SNB and the Federal Reserve declined to comment. Finma and the Bank of England did not immediately respond to requests for comment.

The opportunity for a deal comes days after the Swiss central bank was forced to extend an emergency 50 billion Swiss franc ($54 billion) credit line to Credit Suisse.

See: Credit Suisse shares jump as Swiss banking giant says it will borrow from SNB and buy back debt

That failed to stop its share price from falling to a record low after its largest investor ruled out providing additional capital and its chairman acknowledged that the exodus of wealth management clients continues.

American Depositary Receipts Credit Suisse CS,
-6.94%
jumped more than 7% in the extended session on Friday after falling 7% late in the regular trading day. ADRs fell 24% over the week, while the S&P 500 rose 1.4% over the week. SPX,
-1.10%
Stock trading in Zurich suffered its worst week since the 2008 financial crisis.

The proposed takeover reflects a sharp divergence in the fortunes of the two banks.

Over the past three years, UBS shares are up about 120%, while shares of its smaller competitor are down about 70%. UBS has a market capitalization of $56.6 billion, while Credit Suisse closed trading on Friday with a value of $8 billion. In 2022, UBS made a profit of $7.6 billion, while Credit Suisse made a loss of $7.9 billion, effectively wiping out all the profits from the previous decade.

Bloomberg News previously reported that Deutsche Bank AG DBK,
-1.53%
monitored the situation at Credit Suisse for potential acquisition openings for certain businesses.

American investment giant BlackRock BLK,
-0.04%
The Financial Times also said it developed a competing approach, evaluated a number of options and spoke with other potential investors. However, BlackRock denied that it was working on a possible competitive offer for Credit Suisse Group AG, according to Bloomberg News.

A complete merger between UBS and Credit Suisse would create one of the largest global systemically important financial institutions in Europe. UBS has a total balance sheet of $1.1 trillion and Credit Suisse $575 billion.