UBS considers takeover of Credit Suisse with Swiss government support

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UBS considers takeover of Credit Suisse with Swiss government support

Swiss bank UBS is reportedly exploring a takeover of Credit Suisse, with a possible government guarantee to cover the associated risks, according to two sources with knowledge of the matter. Under the proposed plan, Credit Suisse's Swiss business could be spun off. Regulators have been pushing for the merger, as Credit Suisse finds itself under pressure after rivals became more cautious in their dealings with the bank. Credit Suisse has already tapped into $54 billion in central bank funding to weather market turmoil caused by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week.

UBS, Switzerland's largest bank with a market value of $65 billion and the world's largest wealth manager, has also had its share of difficulties, including a bailout during the global financial crisis more than a decade ago. The bank has gone through several restructurings, including job cuts and a reduction in its investment bank to lower risk and improve returns. Both UBS and Swiss financial regulator FINMA declined to comment on the potential merger.

Credit Suisse CFO Dixit Joshi and his team will reportedly hold meetings over the weekend to evaluate the bank's options. Founded 167 years ago, Credit Suisse is one of the oldest and most prestigious Swiss banks.

Credit Suisse's ongoing struggles have prompted speculation about potential mergers, with Deutsche Bank, ING Groep, and Societe Generale mentioned as possible partners. Despite the mounting pressure, Credit Suisse CEO Thomas Gottstein has maintained that the bank can navigate its current challenges without resorting to a merger or sale.

UBS's potential takeover of Credit Suisse would be a significant move in the Swiss banking sector, creating a dominant player in the country's financial industry. However, it remains to be seen if such a merger would be feasible, given the complexities and regulatory hurdles involved.

UBS has not made any official statement regarding the potential takeover, and it is unclear whether the bank will move forward with the plan.

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