By Stefania Spezzati, Oliver Hirt and John O’Donnell
(Reuters) – UBS is close to finalizing a deal to buy rival Swiss bank Credit Suisse, a source familiar with the matter told Reuters.
The deal is valued at more than $2 billion, after UBS increased its offer, the Financial Times earlier reported. The Credit Suisse chair declined to comment when reached on his cell phone.
The Swiss National Bank has agreed to offer a $100 billion liquidity line to Credit Suisse, the FT said.
A news conference is expected later on Sunday.
Officials have been racing to rescue the 167-year-old bank, among the world’s largest wealth managers, after a brutal week saw the second- and third-largest U.S. bank failures in history. As one of 30 global banks seen as systemically important, a deal for Credit Suisse could ripple through global financial markets.
At least two major banks in Europe are examining scenarios of contagion possibly spreading in the region’s banking sector and looking to the Federal Reserve and the European Central Bank to step in with stronger signals of support, two senior executives with knowledge of the discussions said.
A person with knowledge of the talks earlier told Reuters that UBS sought $6 billion from the Swiss government as part of a purchase. The guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges.
One source previously said 10,000 jobs may have to be cut if the two banks combined.
Credit Suisse shares lost a quarter of their value last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined the confidence of investors and clients.
(Reporting by Stefania Spezzati, Oliver Hirt and John O’Donnell; Additional reporting by Reuters bureaus; Writing by Lincoln Feast, Conor Humphries and Nick Zieminski; Editing by William Mallard, Kirsten Donovan, Barbara Lewis, Hugh Lawson, David Holmes and Lisa Shumaker)