Switzerland's largest bank UBS is reported to consider taking over critical Credit Suisse, subject to certain guarantees offered by the Swiss State.
Such a deal can, according to sources, be accelerated and completed before the stock exchange opens on Monday.
According to information provided to Bloomberg, UBS has asked for the government's support to cover certain costs and losses associated with a possible purchase.
The talks between UBS and Credit Suisse are led by the country's authorities, which hope that a merger will avoid a crisis of confidence in the banks.
The potential transaction is on such a scale that the authorities have contacted representatives of other countries, including the US. According to Bloomberg's and Financial Times' information, the goal is to have an agreement in place already during the weekend.
According to Financial Times sources, the authorities can open a "fast track" in the permit process for the deal to be completed before Monday morning, writes Dagens industri
In the past, there have been indications that German Deutsche Bank also expressed an interest in acquiring parts of Credit Suisse, but no bids were made .
Confidence at rock bottom
Trust in the ancient Credit Suisse – number two in Switzerland – has been under way since the recent cancelation of the publication of an annual report and this week confirmed that there were "significant weaknesses" in the financial reporting of the Bank for the past two years.
The share in Credit Suisse rushed during the beginning of the week for rumors of a possible takeover, but on Friday the share turned down again after the major competitor UBS explained that it was not interested in a merger – which seems to have turned around.
According to Financial Times sources, over the weekend the boards of the two major banks have gathered separately to discuss the matter. A crucial issue for UBS is said to have been the risks associated with Credit Suisse, which has not been profitable for several years, hence the requirement for guarantees.
The talks between the parties are conducted under the direction of the Swiss Central Bank and the equivalent of the Financial Supervisory Authority, FINMA.
A possible merger would create a gigantic bank, which would also raise questions about the competitive situation.
On Thursday, an aid package of SEK 650 billion was presented to Credit Suisse. Nevertheless, investors continued to sell and the stock to fall.
None of the banks or authorities involved wish to comment on the information.
"Credit Suisse has been misbehaved for a long time. They have taken too much risks and had poor control of risks and customers, which has given a lengthy series of problems in recent years", said Andreas Håkansson, analyst at Danske Bank, to TT earlier this week.
Facts: UBS and Credit Suisse
UBS is Switzerland's largest bank and one of the world's 50 largest. Has old history but the bank is the result of several hundred acquisitions and mergers over the years.
The Bank is based in Zurich but operates globally, with more than 70 000 employees worldwide.
The company is currently valued at nearly SEK 720 billion, a decrease of just a few weeks of over SEK 150 billion.
Credit Suisse is Switzerland's second largest bank. It was founded in 1856 and has its headquarters in Zurich. The bank has around 50.000 employees worldwide.
In one year the share has lost three quarters of its value and the year-end for 2022 ended with a loss of SEK 84 billion.
The collapse of the course has taken place after several years marked by scandals, dismissed managers and legal problems. The 2022 annual report was recently blocked due to question marks in the financial reporting.
The stock market value of the company today is just over SEK 90 billion. In January 2022 it was valued at over SEK 450 billion.
Sources: Bloomberg, UBS, Credit Suisse