UBS is about to take over its rival, Credit Suisse, in an effort to stop the imperiled financial institution from collapsing.
The Wall Street Journal said that a deal for UBS to acquire Credit Suisse could come Sunday or earlier and regulators have offered to waive a custom shareholder vote requirement, but one of the sticking points is who will own Credit Suisse's retail arm.
Credit Suisse, which has been in business for more than 167 years, announced earlier in the week it was of over $50 billion from the Swiss National Bank in a move that the company said is a decisive action to boost its liquidity amid a global banking crisis after the collapse of Silicon Valley Bank and concerns about Credit Suisse's future outlook.
Credit Suisse is taking decisive action to strengthen its liquidity by intending to use its option to borrow from Swiss National Bank SNB up to CHF 50 billion under a Covered Loan Facility and a short-term liquidity facility, which is fully collateralized by high quality assets, according to a statement by Credit Suisse.
UBS is asking Swiss government to cover $6 billion in costs if it goes ahead with the purchase, according to a report on Saturday.
The frenzied weekend negotiations come after a brutal week for banking stocks in Europe and the United States to shore up the sector that was rocked by the recent collapse of Silicon Valley Bank, which represented the second largest bank collapse in U.S. history.
Swiss regulators are trying to present a solution for Credit Suisse before markets open on Monday, but the complexities of merging two behemoths raises the possibility that talks will last well into Sunday, said the person who asked to remain anonymous because of the sensitivity of the situation.
Two people with knowledge of the matter said that the UBS, which boasts over $1.1 trillion in assets, was under pressure from the Swiss authorities to take over its local rival to get the crisis under control. Credit Suisse's Swiss business could be spun off, according to the plan.
Swiss authorities are preparing to use emergency measures to fast-track the deal, according to two people familiar with the situation, according to the Financial Times.
U.S. authorities are involved in the situation, working with their Swiss counterparts to help broker a deal, according to those familiar with the matter, according to Bloomberg News.
Credit Suisse shares lost a quarter of their value in the last week and is trying to recover from a series of scandals that have undermined the confidence of investors and clients.
The company is considered one of 30 global, systemically important banks that would have a negative impact on the entire financial system and is considered one of the world's largest wealth managers.
Credit Suisse and UBS didn't respond immediately to a request for comment from Fox Business.