UBS acquires part of Credit Suisse in a deal amidst financial industry turmoil

UBS, the Swiss multinational investment banking and financial services company, has acquired a significant portion of Credit Suisse as part of a deal to help the beleaguered financial institution navigate mounting pressures in the industry.

The acquisition forms part of a broader strategy by UBS to expand its global footprint. Reports suggest the acquisition deal could range between a strategic partnership between the firms to UBS acquiring significant shares in Credit Suisse. The move comes as Credit Suisse is thought to be considering all options, including a potential merger with UBS.

The financial industry has been in a state of flux due to the economic fallout of the global COVID-19 pandemic. A slump in asset prices and interest rates has left large financial institutions grappling to stay afloat. Credit Suisse, in particular, has been seeking ways to restructure its balance sheets, selling assets, and cutting jobs to mitigate losses.

Both UBS and Credit Suisse previously held acquisition talks in 2020, but the deal failed to materialize due to regulatory pressures. This time, however, the acquisition seems likely given the urgency of the situation.

A representative from Credit Suisse stated that the company is excited about working with UBS because of the bank’s extensive network and strong financial position. UBS CEO Ralph Hamers, on the other hand, expressed confidence in the deal’s potential to create long-term value for clients and shareholders.

The deal is expected to close later this year, subject to regulatory approvals.