Shares of Credit Suisse bank plummet on the Swiss stock market and on Wall Street this Monday, after the purchase announcement to avoid the bank’s total bankruptcy. But UBS rises, despite debt risk soaring to an 11-year high.
bank shares Credit Suisse collapse on the Swiss stock market and on Wall Street this Monday, March 20, after the purchase announcement to avoid the total bankruptcy of the bank. Meanwhile, UBS surprises with a rise in this erratic day for banks.
On the Zurich stock market it collapses 53% while on Wall Street it does so by -51%. Meanwhile, UBS surprises with an advance of 3% and the New York stock market rises 6%, despite the fact that the UBS Credit Default Swap reached a record of 11 years.
Under the terms of the transaction, which have been explained by UBS in a separate statement, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares they own, which is equivalent to CHF 0.76 per share. , in an operation valued at 3,000 million Swiss francs.
The price is a significant discount to Credit Suisse’s closing price last Friday (1.81 Swiss francs per share). In addition, UBS expects the transaction to generate earnings per share by 2027 and for the bank to remain capitalized well above its 13% target.
According to the details offered in a statement issued by the Swiss National Bank (SNB), “this acquisition has been made possible thanks to the support of the Swiss federal government, the Swiss Financial Market Supervisory Authority (Finma) and the SNB“. “With the acquisition of Credit Suisse by UBS, a solution has been found to ensure financial stability and protect the Swiss economy in this exceptional situation,” he adds.
In fact, the operation has had the support of the European Central Bank (ECB), the US Federal Reserve (Fed) and the Financial Conduct Authority (FCA) of the United Kingdom.
“I welcome the quick action and decisions taken by the Swiss authorities,” ECB President Christine Lagarde explained. For their part, the US Treasury Secretary, Janet Yellen, and the Fed Chairman, Jerome Powell, welcomed “the announcements by the Swiss authorities to support financial stability.”
Source: Ambito
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