LONDON’S BUSINESS NEWSPAPER
POLITICAL WINDFALL HOW THE GOVERNMENT WON OVER THE TECH FOUNDERS P14 MONDAY 20 MARCH 2023
ISSUE 3,952
CITYAM.COM
THE BREAKDOWN WHAT WE KNOW AFTER A GREAT SIX NATIONS P19 FREE
SWISS GOVERNMENT BROKERS DEAL THAT SEES UBS BUY EMBATTLED RIVAL CREDIT SUISSE CHRISTOPHER DORRELL AND STAFF THE SWISS government last night brokered a discount $3bn (£2.6bn) deal that will see UBS rescue its stricken rival Credit Suisse and avoid “irreparable” damage to the global financial system. In an extraordinary press conference last night, the Swiss President said deposit outflows at Credit Suisse on Friday meant it was “no longer possible to restore the necessary confidence” in the bank and that a “stabilising” solution was required. “This solution is a takeover of Credit Suisse by UBS,” Alain Berset said, adding that the historic bank’s failure would have had “unthinkable consequences for Switzerland and the international markets.” The deal, to be completed by the end of the year, will bring to an end a 176-year history at Credit Suisse. The lender suffered a dramatic share
price collapse last week after its largest shareholder, the Saudi National Bank, said it would not inject any further capital into the bank, which lost around £7bn last year. There were already fears the aftermath of Silicon Valley Bank’s collapse in the United States would signal further bank failures. Yesterday, the Swiss financial
authorities said that recent measures – including Credit Suisse drawing on a nearly £50bn credit facility provided by the Swiss National Bank – had not been enough to “restore confidence”. In order to get the deal across the line,
the Swiss authorities have provided UBS with insurance in the form of an almost £8bn loss guarantee on a clearly defined part of Credit Suisse’s portfolio. Last night, UBS chair Colm Kelleher said the deal represented an “enormous” opportunity. He will remain as chair of the surviving entity, which will continue to be known as UBS, and the bank’s boss Ralph Hamers will also stay on. Axel Lehmann, the Credit Suisse chair, said that “given recent extraordinary and unprecedented circumstances”, a merger was the right call. It was not immediately clear what the impact would be on Credit Suisse staff. Kelleher said he would run down the firm’s investment banking division, but in a statement Credit Suisse said that “UBS has expressed its confidence that the employment of the staff of Credit Suisse will be continued”. £ CRISIS COVERAGE: PAGES 2-3
INSIDE JOHN LEWIS’ STAFF-OWNED STRUCTURE AT RISK P5 JOHNSON BRACES FOR PARTYGATE GRILLING P8 HOUSING MARKET DEFIES GRAVITY P9 MARKETS P12 OPINION P14