The merger with UBS concluded a bewildering descent for Credit Suisse, as its depositors and counterparties lost faith over the course of a working week
The transaction concluded a bewildering descent for Credit Suisse, as its depositors and counterparties lost faith over the course of a working week. The banking system survived, even if 167 years of Swiss banking history did not. Now attention has turned to the impact of the hastily written terms of the deal—and the prospects for Switzerland’s new banking supergroup.
steadied the ship, Credit Suisse sank lower in a series of high-profile mishaps. Last year the bank lost SFr7.3bn , its worst performance since 2008. Credit Suisse’s share price had fallen by 70% in the three years before the deal; that ofThe merger valued Credit Suisse at around SFr3bn, a 60% discount on its stockmarket valuation and a fraction of its SFr42bn tangible book value.
The combination of the banks’ wealth-management and Swiss banking operations could prove potent, even if there are potential snags. Previous wealth-management mega-deals have seen clients flee. Some prefer to park their money with more than one institution—an approach which seems all the more sensible after the past fortnight. Shares in Julius Baer, another of Switzerland’s courtiers to the rich, jumped this week in expectation of new clients.
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