Credit Suisse: Credit Suisse has found a savior, know how much the deal was done.
Geneva: Switzerland’s troubled bank Credit Suisse has found a savior. Due to the crisis of this bank, there was an upheaval in the global banking system. With the aim of preventing this, UBS (UBS), a major financial company of Switzerland, will buy Credit Suisse for about $ 3.25 billion. Credit Suisse said last Thursday that it would take a loan of up to $ 54 billion from the Swiss Central Bank (Central Bank) after its shares fell. However, even this did not reassure the bank’s customers and investors. Subsequently, the Swiss authorities requested UBS to take over the troubled bank.
for the stability of the financial sector
Swiss President Alain Barset said the deal was a major step forward for the stability of the international financial sector. “An uncontrolled collapse of Credit Suisse would have caused huge problems for the country and the international financial system,” he said. The country’s executive branch, a seven-member governing body, issued an emergency ordinance requiring shareholder approval. The merger has been approved without the bank. Credit Suisse Chairman XL Lehman described the deal as a game changer.
Acquisition will give rise to immense possibilities
Kom Kelleher, chairman of UBS, said the acquisition opens up huge opportunities. It is noteworthy that earlier Credit Suisse had said that it would borrow $54 billion from the Swiss central bank to increase its liquidity. Fears about a global banking crisis deepened among investors after a sharp fall in Credit Suisse’s stock.
What will be its effect on India?
Equity analysts at Jefferies said on Thursday itself that the Credit Suisse crisis is expected to have little impact on the Indian banking sector. He said that the Swiss lender has a relatively small presence in India. Jefferies estimates that Credit Suisse accounts for 1.5 per cent of total foreign bank assets in India and just 0.1 per cent of total banking assets. Significantly, Credit Suisse has only one branch in India. The total asset of this branch is 200 billion rupees.
