Credit Suisse, UBS and their key regulators are negotiating a deal to merge Switzerland’s two biggest banks, the Financial Times reported on Saturday. The Swiss National Bank and regulator Finma have told international counterparts they see a deal with UBS as the only option to prevent a breakdown in confidence in Credit Suisse CSGN, -8.01% CS, -6.94% . Deposit outflows from the bank peaked at Sfr10bn ($10.8bn) in a single day late last week as fears for its health grew, the report said. The boards of both the banks are meeting this weekend. Credit Suisse’s main regulators in the US, UK and Switzerland are considering the legal framework of the deal and several concessions sought by UBS UBSG, -1.16% UBS, -5.50% . UBS wants to be allowed to phase in any demands it faces under global rules on capital for the world’s biggest banks. In addition, UBS has requested some type of indemnity or government agreement to cover future legal costs, one of the people said. UBS, Credit Suisse, the SNB and the Federal Reserve declined to comment. Finma and the Bank of England did not immediately respond to requests for comment. The prospect of a deal comes days after the Swiss central bank was forced to provide an emergency SFr50bn ($54bn) credit line to Credit Suisse. see: Credit Suisse shares rose as the Swiss banking giant said it would borrow from the SNB and buy back debt, failing to arrest a slide in its share price after its biggest investor refused to provide more capital and its The chair has fallen to a record low since it was accepted. That the exodus of wealth management clients continued. The potential takeover marks a stark contrast in the fortunes of the two banks. Over the past three years, UBS shares have gained about 120 percent while those of its smaller rival have fallen about 70 percent. UBS has a market capitalization of $56.6bn, while Credit Suisse closed trading on Friday with a value of $8bn. In 2022, UBS generated a profit of $7.6bn, while Credit Suisse posted a loss of $7.9bn, effectively wiping out the entire past decade of earnings. Earlier Bloomberg News reported that Deutsche Bank AG DBK, -1.53% is monitoring the situation at Credit Suisse for possible openings to acquire certain businesses. U.S. investment giant BlackRock BLK, -0.04% took a rival approach, evaluating a number of options and talking to other potential investors, the Financial Times also reported. However, BlackRock denied it was working on a potential rival bid for Credit Suisse Group AG, according to Bloomberg News. A full merger between UBS and Credit Suisse will create one of the largest global systemically important financial institutions in Europe. UBS has $1.1tn of total assets on its balance sheet and Credit Suisse has $575bn.
