(Adds Credit Suisse declining comment, UBS context, changes
media tag to GLOBAL-BANKS/CREDIT SUISSE-UBS GROUP)
By John O'Donnell
FRANKFURT, March 18 (Reuters) - UBS is
examining a takeover of Credit Suisse that could see
the Swiss government offer a guarantee against the risks
involved, said two people with knowledge of the matter on
Saturday.
The people said that UBS was coming under pressure from the
Swiss authorities to carry out a takeover. Under the plan,
Credit Suisse's Swiss business could be spun off, they added.
UBS, Credit Suisse, and Switzerland's financial regulator
FINMA declined to comment when approached by Reuters.
Regulators have urged Credit Suisse Group to pursue a deal
with Swiss rival UBS as the troubled bank began a make-or-break
weekend after some rivals grew cautious in their dealings with
it.
Credit Suisse Chief Financial Officer Dixit Joshi and his
teams will hold meetings over the weekend to assess the bank's
options, people with knowledge of the matter said on Friday.
The 167-year-old bank is the biggest name ensnared in the
market turmoil unleashed by the collapse of U.S. lenders Silicon
Valley Bank and Signature Bank over the past week, forcing the
Swiss bank to tap $54 billion in central bank funding.
Dating back to the mid-nineteenth century, UBS is
Switzerland's biggest bank with a market value of 60 billion
Swiss francs ($65 billion) and the world's largest wealth
manager.
UBS itself has had its own tumultuous periods, with a
clampdown on banking secrecy and a bailout during the global
financial crisis more than a decade ago.
It went through several restructurings, cutting thousands of
jobs, and pared back the investment bank to reduce risk and
improve returns.
Earlier this week, UBS Chief Executive Ralph Hamers said he
was focused on organic growth rather than M&A.
Last year, he backtracked on a deal to buy Wealthfront, a
$1.4 billion transaction that would have fast-tracked UBS's
growth in the U.S. market. Also last year, Hamers said he
expected to see more local mergers and acquisitions than
cross-border consolidation in the European banking industry.
The bank this year has said the outlook is uncertain as the
war in Ukraine and the surge in interest rates drags down client
confidence.
The turmoil at Credit Suisse has put another dent in the
Swiss reputation for financial stability on which UBS depends.
Headquartered just a few minutes' walk away from each other,
not far from Lake Zurich in the centre of the city with
snow-capped mountains on the horizon, the two lenders have been
pillars of global finance for decades.
At the end of 2022, UBS had $2.8 trillion in invested assets
in its global wealth management business and $1.1 trillion at
its asset management division, both down from a year earlier.
It employs more than 72,000 people.
UBS's pretax profit of $5 billion from wealth management in
2022 dwarfed the $1.9 billion from investment banking.
UBS earned $7.1 billion in revenue from securities trading
in 2022, competing with Wall Street firms in buying and selling
stocks, currencies and bonds. The bank made $1.6 billion in
revenue from advising on deals.
Any tie-up would be one of the biggest since the global
financial crisis.
(Reporting by John O'Donnell; Editing by Elisa Martinuzzi, Tom
Sims and Hugh Lawson)
