Switzerland's largest bank UBS is asking the Swiss government to cover about $6 billion in costs if it buys Credit Suisse, as the two sides race to reach a deal to restore confidence in the Swiss bank, Reuters reported on Tuesday, citing an anonymous source.
The government guarantee UBS is seeking would help cover the costs of recovering Credit Suisse units and potential litigation fees, Reuters reported.
Talks are ongoing and the figure could change as several scenarios are still being considered. Credit Suisse was valued at around $8 billion as of the end of March 17.
Deutsche Bank is also interested in buying parts of Credit Suisse, but a deal with Germany's biggest bank is likely to take longer, Reuters sources said.
Swiss authorities are said to have pressured UBS to take over Credit Suisse to control the crisis. Photo: UBS
Credit Suisse is the biggest name caught up in the turmoil caused by the collapse of US lenders Silicon Valley Bank and Signature Bank last week.
Shares of the 167-year-old bank have plunged more than 30%, prompting authorities to rush into emergency measures to salvage the situation.
Talks to resolve the confidence crisis at Credit Suisse are facing significant obstacles, and if Switzerland's two largest banks were to merge, they would likely have to cut 10,000 jobs, Reuters reported.
Swiss regulators are racing to come up with a solution for Credit Suisse before markets reopen on March 20. However, given the complexity of combining the two Swiss giants, negotiations are likely to drag on until March 19, Reuters sources said.
Credit Suisse, UBS and the Swiss government all declined to comment on the matter .
Nguyen Tuyet (According to Reuters, CNBC)
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