WSJ Print Edition Said UBS in Talks to Take Over Credit Suisse

WSJ Print Edition says the banks have discussed a number of scenarios, including those that end with UBS taking over all or parts of Credit Suisse, according to the people familiar with the situation.

UBS has long been seen as part of any state-backed solution for Credit Suisse, which has a balance sheet roughly half the size of UBS’s $1.1 trillion in total assets. Any full-scale takeover would give UBS prized businesses within Credit Suisse, such as wealth clients in Asia and the Middle East, but might come with less desirable units such as Credit Suisse’s troubled investment bank. It also could derail UBS’s existing strategy and perceived stability with investors.

UBS has a market capitalization of roughly $65 billion, versus Credit Suisse’s $8 billion, according to FactSet.

A combination could be subject to additional supervision and capital charges, as both banks are of great importance in Switzerland and worldwide.

We hope that before Monday, the Swiss authorities will have an agreement. A spokesman for financial regulator Finma and the SNB declined to comment. A finance ministry spokeswoman said it doesn’t comment on rumors.

What FT said above, it may not be a Credit Suisse and USB transaction. They are the top two banks by assets in Switzerland, serving savers and businesses there, and rich customers across the globe. Both have Wall Street investment banks and large asset management arms.

UBS Might Not Be The Only Player in The Mix

Other financial institutions are examining the situation to see if they could buy parts of Credit Suisse or back bids, people familiar with those efforts said.

Large asset managers have long coveted some of the bank’s investing businesses, including its European real estate and U.S. asset-management arms. Credit Suisse’s executives have repeatedly rebuffed those offers, arguing that asset management was a core part of its operations.

Credit Suisse’s slide toward state assistance came after other banks and large investors pulled back last week from doing business with the Swiss lender. Other investment firms stopped trading with the bank in the fall, as its yearslong problems got worse, people familiar with the matter said to WSJ Print Edition.

Analysts have been concerned about rich customers pulling their money. Executives at other banks said they got inflows from Credit Suisse clients last week.

Using UBS to save Credit Suisse marks a turnaround from nearly 15 years ago, when Switzerland bailed out UBS after it got stuck with billions of toxic assets in its U.S. business. Credit Suisse declined state aid at the time and emerged from the crisis in stronger shape.

The bank underwent a series of restructurings. Credit Suisse’s latest management team, some who worked previously at UBS, had appealed for more time to prove they could turn things around.