Credit Suisse is reportedly reviewing plans for potential a merger with Swiss rival UBS as part of a broader overhaul of the group to address dissatisfied investors and prevent a foreign hostile takeover.
Senior management at Credit Suisse is due to meet next week, according to a «Reuters» report citing unnamed sources, to examine restructuring proposals throughout early July.
Potential moves being debated include a spin-off of the local Swiss bank to prepare for a merger, downsizing of the investment bank, sale of the asset management or the U.S. investment banking business.
Management discussions are in the preliminary stages and no decisions have yet to be taken.
Merger ASAP
According to multiple sources cited by the report, there are growing fears about pressure from activist investors and the potential of a hostile takeover by a foreign entity.
«Credit Suisse needs a merger deal right away,» said one source. «There is growing concern in Zurich that activist investors will go after them if they stand still.»
«The Swiss establishment is aware that without a domestic merger Credit Suisse will disappear in foreign hands,» said another source.
Post-CS Bank
Even if Credit Suisse is to fend off foreign interest and merge with UBS, regulators are expected to express concern about the dominant position of the combined banks and potentially demand strengthened capital on the balance sheet.
A merger between UBS and Credit Suisse would result in a workforce of over 110,000 and a market value of more than $85 billion.
According to the report, other potential suitors include Wall Street banks, in addition to UBS.
