HomeBusinessUBS to buy Swiss bank Credit Suisse for $3.23 billion

UBS to buy Swiss bank Credit Suisse for $3.23 billion

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The federal government of Switzerland has announced that UBS will purchase Credit Suisse. The president, Alain Berset, provided this information on March 19. Berset said the suggested solution had “the endorsement of the Federal Council.”

USB will pay 3 billion Swiss francs (about 3.23 billion dollars) to acquire “Credit Suisse” and incur approximately $5.4 billion in losses. The acquisition is anticipated to be finalised by the end of 2023.

The Swiss central bank announced today that the transaction comprises 100 billion Swiss francs ($108 billion) in liquidity support for UBS and Credit Suisse.

At a news conference, Colm Kelleher, president of UBS, stated that his institution would progressively liquidate the global investment bank Credit Suisse, which employs thousands of people. By 2027, UBS anticipates achieving yearly savings of $7 billion.

Last week, Credit Suisse shares lost a fourth of their value. As it struggles to recover from scandals that have damaged investor and customer confidence, the bank was obliged to use $54 billion in central bank funds.

The news of the impending takeover of the struggling Swiss bank by its rival was met with approval by major financial players in Europe and North America.

The European Central Bank (ECB) has characterised Switzerland’s response to Credit Suisse’s issues as essential to reestablishing market stability. Also, the ECB vowed to provide European banks with credit if necessary.

Secretary of the Treasury Janet Yellen and Chairman of the Federal Reserve Board Jerome Powell applauded the announcement of the Credit Suisse acquisition. 

The Bank of England applauded the Swiss authorities’ decision to negotiate an agreement and stated that the UK banking sector was adequately capitalised.

Frontier India News Network
Frontier India News Networkhttps://frontierindia.com/briefs
Frontier India News Network is the in-house news collection and distribution agency.

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