Local media reported that the Swiss cabinet had met for a crisis meeting at 5pm on Saturday (3am, Sunday, AEDT) to discuss the future of the ailing bank, as reports swirled about a possible takeover by its biggest Swiss rival, UBS, and the possible shedding of up to 10,000 jobs.
A spokesman for the Swiss Finance Ministry declined to comment.
The bank’s shares lost 25 percent over the course of the week, despite a US$54 billion (AU$80.65 billion) emergency loan from the Swiss National Bank. The price of financial contracts designed to protect investors against possible losses on their bonds soared to record levels.
More than $450 million (AU$672.04 million) was withdrawn from European and US funds managed by the bank between Monday and Wednesday, according to Morningstar.
The Swiss central bank’s lifeline, announced Wednesday night after shares plunged to a new all-time low, only bought Credit Suisse for some time.
Reuters and the UK financial times, citing people familiar with the matter, reported that Swiss regulators were urging UBS to agree to a Credit Suisse bailout before markets open on Monday to bolster confidence in the country’s banking system. He financial times He said the boards of UBS and Credit Suisse were expected to meet separately over the weekend.
Credit Suisse and UBS declined to comment to Reuters.
BlackRock, which owns 4 percent of Credit Suisse, denied a separate report in the Financial Times that it was preparing an alternative offer for all or part of the embattled bank.
“BlackRock is not involved in, and has no interest in, any plans to acquire all or part of Credit Suisse,” a BlackRock spokesperson told CNN.
Credit Suisse, which is among the 30 largest banks in the global financial system, has been on the ropes for years after a series of scandals, huge losses and strategic missteps. Its shares are down 75 percent in the past 12 months. But the confidence crisis escalated rapidly this month.
The failure of Silicon Valley Bank last week, the biggest for a US lender since the 2008 global financial crisis, sent investors fleeing other perceived weak players.
Then Credit Suisse dropped another bombshell. Publishing its annual report on Tuesday, the 167-year-old bank acknowledged a “material weakness” in its financial reporting, adding that it had failed to adequately identify potential risks to its financial statements.
The next day its largest shareholder, the Saudi National Bank, made it clear it would not pump more money into the bank, after spending $1.5 billion (AU$2.24 billion) last year for a nearly 10 percent stake. That spooked investors.
In a note on Thursday, JPMorgan banking analysts wrote that a takeover by UBS was the most likely endgame.
There are reports from Reuters and Bloomberg that at least 10,000 jobs will have to go if the acquisition goes ahead.
UBS would likely spin off Credit Suisse’s Swiss business, as the combined market share would represent about 30 percent of Switzerland’s domestic banking market and would mean “too much concentration risk and market share control,” they added.
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