Finance

Credit Suisse could seek UBS merger on the back of Archegos, Greensill scandals

Credit Suisse executives are looking for ways to overhaul the bank and a merger with Swiss rival UBS may be on the cards.

The bank has seen its share price hurt post the Archegos meltdown, in which Credit Suisse took a $5bn hit. The Greensill Capital collapse, triggered when it suspended $10bn in funds used by the supply chain finance firm, also impacted.

Reuters reported that three people familiar with the bank’s thinking said the new strategic direction could include seeking a merger with UBS.

“Credit Suisse needs a merger deal right away,” a person with knowledge of the bank’s thinking told Reuters.

“There is growing concern in Zurich that activist investors will go after them if they stand still.”

The bank’s share price has dropped by nearly a quarter since March when the Greensill scandal came to light.

Former Lloyds boss Antonio Horta-Osorio, the bank’s new chair, announced a strategic review in April.

UBS and Credit Suisse declined to comment.

READ Credit Suisse offers pay hikes to stem exits amid Archegos fallout

A merger between Credit Suisse and UBS would create a bank with a workforce of more than 110,000 and a market value of more than $85bn.

The bank’s executives fear its falling share price could leave it vulnerable to investors calling for a breakup, or to a foreign hostile takeover, the report said.

READ Credit Suisse warns of an extra $654m hit from Archegos coming

Other options include spinning-off its local Swiss bank to position the business for a merger, cutting back its investment bank or selling its asset management arm, Reuters reported.

To contact the author of this story with feedback or news, email James Booth

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