UBS in talks to acquire Credit Suisse

UBS is in discussions to take over all or part of Credit Suisse, with the boards of Switzerland’s two biggest lenders set to meet separately over the weekend to consider Europe’s most consequential banking combination since the financial crisis, according to multiple people briefed on the talks.

The Swiss National Bank and regulator Finma are orchestrating the talks in an attempt to shore up confidence in the country’s banking sector, the people said. Their intervention comes days after the central bank was forced to provide an emergency SFr50bn ($54bn) credit line to Credit Suisse.

However, this failed to arrest a slide in its share price, which has fallen to record lows after its largest investor ruled out providing any more capital and its chair admitted that an exodus of wealth management clients had continued.

UBS has a market value of $56.6bn, while shares in Credit Suisse closed on Friday with a value of $8bn.

Swiss regulators told their US and UK counterparts on Friday evening that merging the two banks was their “plan A” to arrest a collapse in confidence in Credit Suisse, a person familiar with those discussions told the FT.

A number of different options are under discussion between the two banks, another person told the FT, who added that both sides are trying to evaluate regulatory constraints in different jurisdictions. This person added that UBS is also analysing the potential risks a deal could have for its own business.

The focus from the central bank is to agree on a simple and straightforward solution before markets open on Monday, one of the people said. There is no guarantee a deal will be reached.

Credit Suisse declined to comment. UBS declined to comment, as did the Bank of England and the Federal Reserve. The Swiss National Bank did not respond to requests for comment.

This is a developing story. More to follow . . .