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Tag: CH:CSGN

  • UBS inks pact with Swiss government as Credit Suisse deal may close next week

    UBS inks pact with Swiss government as Credit Suisse deal may close next week

    UBS said Friday that it’s signed a loss protection agreement with the Swiss government covering up to 9 billion francs ($10 billion) of losses once the takeover of Credit Suisse is completed.

    The finalized deal sets the stage for the merger of the Swiss banks to be completed as early as June 12.

    Terms call for the guarantee to only be implemented if UBS takes 5 billion francs of losses from what are called non-core assets of Credit Suisse.

    The protection applies to roughly 3% of the combined assets of the merged bank. UBS is paying the Swiss government an upfront fee of 40 million francs, as well as an annual maintenance fee of 0.4% and a risk premium depending on how much of the guarantee is used. UBS does have the right to terminate the guarantee at any time.

    The per-share value of the UBS offer
    UBS,
    -0.05%

    UBSG,
    -0.25%
    has climbed slightly since the deal was first announced, as it’s now worth 0.81 francs per share, valuing Credit Suisse at 3.2 billion francs, or $3.6 billion.

    UBS agreed to buy its rival for an initially announced 3 billion francs after Credit Suisse
    CS,
    +0.49%

    CSGN,
    -0.20%
    was unable to stem outflows from its wealthy clients.

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  • UBS Expects to Complete Credit Suisse Acquisition, Delisting as Early as Next Week – Update

    UBS Expects to Complete Credit Suisse Acquisition, Delisting as Early as Next Week – Update

    By Pierre Bertrand

    UBS Group said it expects to complete its acquisition of Credit Suisse Group and have the shares of the Swiss peer delisted as early as next week.
    

    Upon completion, Credit Suisse will be merged into UBS and its shares and American depositary shares will be delisted from the SIX Swiss Exchange and the New York Stock Exchange, UBS said in a statement Monday.
    

    

    If the acquisition is finalized before the opening of trading in the U.S. on June 12, Credit Suisse will de delisted in New York on June 12 and delisted in Switzerland on June 13, UBS said.
    

    If the deal is finalized after the opening of trading in the U.S. on June 12, the delisting on the NYSE and the SIX will both occur on June 13, UBS added.
    

    UBS, which received the European Union’s clearance for its takeover of Credit Suisse last month, said Credit Suisse shareholders will receive one UBS share for every 22.48 outstanding shares held and that it will assume all Credit Suisse Group assets and liabilities.
    

    It added that Credit Suisse Group’s obligations under its outstanding debt securities will become UBS obligations.
    

    UBS agreed to take over Credit Suisse as part of an emergency measure in March to shore up the troubled lender and restore confidence in the global banking system.
    

    Write to Pierre Bertrand at pierre.bertrand@wsj.com
    

    

    


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  • 
		
		
    
			
    Deutsche Bank Reports Higher Profit in Tumultuous Quarter
    
			
    Deutsche Bank Reports Higher Profit in Tumultuous Quarter
    
			
    

    Deutsche Bank Reports Higher Profit in Tumultuous Quarter
    


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  • 
		
		
    
			
    Credit Suisse chairman apologizes at final shareholder meeting in 167-year history
    
			
    Credit Suisse chairman apologizes at final shareholder meeting in 167-year history
    
			
    

    

    “We wanted to put all our energy and our efforts into turning the situation around and putting the bank back on track. It pains me that we didn’t have the time to do so, and that in that fateful week in March our plans were disrupted. For that I am truly sorry. I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you.
    

    That’s Axel Lehmann, the chairman of Credit Suisse, addressing shareholders after the deal to be purchased at a cut-rate price by UBS, ending 167 years of independence. Shareholders at neither Credit Suisse
    
        CSGN,
    
        +1.39%
    
       nor UBS
    
        UBSG,
    
        +1.20%
    
       will get a chance to vote on the deal.
    

    Credit Suisse shares were trading at 0.81 francs, just below the 0.84 franc per share offer the UBS bid is now worth. A year ago, Credit Suisse was worth more than 7 francs per share.
    

    

    Lehmann, as noted in his speech, was not at the bank for its many scandals and trading debacles, most notably but hardly limited to the losses from the blowup of the Archegos family office and the freezing of funds tied to Greensill.
    

    “The period from October to March was not long enough. One legacy issue after another had already seen trust eroded – and with it, patience dwindled. At that, we failed. It was too late. The bitter reality is that there wasn’t enough time for our strategy to bear fruit,” said Lehmann.
    

    He said the deal “had to go through,” or the bank would have to restructure under Swiss banking law. “This would have led to the worst scenario, namely a total loss for shareholders, unpredictable risks for clients, severe consequences for the economy and the global financial markets,” he said.
    

    CEO Ulrich Körner made a similar apology. “We ran out of time. This fills me with sorrow. What has happened over the past few weeks will continue to affect me personally and many others for a long time to come,” he said.
    

    He specifically tied the collapse of SVB Financial and Signature Bank to its own demise.
    

    

    


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  • 
		
		
    
			
    Credit Suisse abetted possible criminal tax evasion, Senate committee alleges
    
			
    Credit Suisse abetted possible criminal tax evasion, Senate committee alleges
    
			
    

    

    

    A new Senate Finance Committee report from the Democratic staff alleges that Credit Suisse CS violated key terms of a plea agreement with the Justice Department. The report alleges Credit Suisse transferred nearly $100 million of funds from a family of dual U.S.-Latin American citizens to other banks in Switzerland without notifying the DOJ, enabling what “appears to be potentially criminal tax evasion” for almost a decade, the report says. Several additional Swiss banks may be currently holding large secret offshore accounts for U.S. persons, the report says. Credit Suisse has agreed to be purchased by UBS UBS with the…
    
    

    

    


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  • 
		
		
    
			
    Deutsche Bank shares slump in latest sign of bank worries
    
			
    Deutsche Bank shares slump in latest sign of bank worries
    
			
    

    

    Deutsche Bank shares slumped on Friday, putting the health of another globally systemic important bank in the spotlight heading into the weekend.
    

    The German lender’s shares
    
        DBK,
    
        -8.53%
    
       fell 10% in Frankfurt trade, and the Euro Stoxx bank index
    
        SX7E,
    
        -4.61%
    
       fell 5%.
    

    Deutsche Bank’s 5-year credit-default swaps widened on Thursday, in what Reuters reported was the largest one-day rise in its history. And on Friday, they widened again.
    

    

    It should be noted that Deutsche Bank’s 5-year credit-default swap, which was 215 on Friday, is nowhere near the peak for Credit Suisse, which was 1,194, according to S&P Global data. The higher the value of the CDS, the more likely the market sees the issuer defaulting.
    

    Deutsche Bank’s AT1 bonds have tumbled in value after Switzerland wiped out Credit Suisse’s
    
        CSGN,
    
        -5.19%
    
       securities in the deal for it to be taken over by UBS
    
        UBSG,
    
        -3.55%    .
       
    

    The Invesco AT1 Capital Bond UCITS ETF
    
        AT1,
    
        -1.97%    ,
    
       which invests in these convertible bonds, has dropped 18% this month as investors lose faith in the securities. European and other banking regulators across the globe have insisted they will not follow Switzerland’s precedent, and first let bank equity fall to zero before wiping out the convertible securities in the event of a failure.
    

    “It is doubtful that banks will be able to issue new AT1 anytime soon, increasing the likelihood of outstanding AT1 notes being extended. We consider that the recent events in the banking sector have resulted in substantially increased uncertainty, which is likely to continue to be reflected as substantial short-term volatility in credit markets,” said analysts at ING.
    

    UBS
    
        UBS,
    
        -0.94%
    
       also is feeling the stress in a deal that the banks say might not complete this year. UBS shares dropped 6%.
    

    Related: Analysts say UBS will face revenue pressure before it can cut Credit Suisse costs.
    

    Analysts also noted that a foreign institution tapped a Fed facility for $60 billion, according to data released by the U.S. central bank on Thursday. The Fed does not identify the counterparties. Major central banks do have access to swap lines for dollar borrowing from the Fed, meaning that either it was an institution that does not have that capability, or it was one that wanted to do so anonymously.
    

    Furthermore, Bloomberg News reported the U.S. government was investigating banks including Credit Suisse and UBS for allegedly helping Russians evade U.S.  sanctions.
    

    

    


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  • 
		
		
    
			
    What are CoCos and why are Credit Suisse’s now worth zero?
    
			
    What are CoCos and why are Credit Suisse’s now worth zero?
    
			
    

    

    The Swiss regulator on Sunday announced that it was writing the value of Credit Suisse’s additional Tier 1 bonds — also called AT1 bonds, or contingent convertible bonds or CoCos — down to zero, as part of the bank’s merger with UBS.
    

    The news has spooked investors of the AT1 market, which is valued at about $275 billion. 
    

    

    For more: The $275 billion bank convertible bond market thrown into turmoil after Credit Suisse’s securities wiped out
    

    But what are Cocos and why should you care? Here’s what you need to know:
    

    CoCos, or contingent convertible capital instruments, to give them their full name, are hybrid capital instruments that are structured to absorb losses in times of stress. They were introduced after the 2008 financial crisis to help steer risk away from taxpayers and onto bondholders. 
    

    They are bonds that automatically convert into equity—shares in the bank—when a bank’s capital falls below a certain threshold.
    

    If a bank is functioning normally, investors are paid a coupon, just like any bondholder. But if things go wrong, the bank can “bail in” the CoCo investor, converting debt into shares in what would then be a troubled lender.
    

    Also read: Saudis, Qataris and Norway to see big losses on UBS deal for Credit Suisse
    

    European banks liked to issue CoCos, because they are counted as additional Tier 1 capital. They’re a way for banks to improve their capital ratios, as required under rules put in place after the crisis, without issuing more shares.
    

    U.S. banks don’t issue CoCos—they use a different type of preferred stock to boost their Tier 1 capital. But U.S. investors have been buyers of CoCos for the extra yield they have offered. That’s risky because the instruments can be converted to low-value shares, or entirely wiped out as has now happed with those issued by Credit Suisse
    
        CSGN,
    
        -55.74%
    

            CS,
    
        -52.98%    .
       
    

     CoCos are perpetual bonds, or bonds that have no set maturity date. They can be redeemed if a bank exercises an option to do so, typically after a five-year period. But regulators may block banks from redeeming them, if the cost of issuing replacement debt is much higher. And if a bank becomes highly stressed like Credit Suisse, they can simply be written off.
    

    A call for Credit Suisse bondholders is expected to take place on March 22, according to law firm Quinn Emanuel Urquhart & Sullivan, which said on Monday it is exploring potential legal actions on behalf of AT1 bondholders.
    

    The surprise for some investors on Monday is that the Swiss move has wiped out the bondholders but not the shareholders, even though bondholders typically rank above equity holders in capital structure. 
    

    Not the Credit Suisse CoCos, which were structured to allow for the Swiss regulatory move. 
    

    Under the terms of the deal with UBS, Credit Suisse shareholders will be able to exchange their shares for about 0.70 francs, which is below where the stock closed Friday, but more than the bondholders will receive. 
    

    Most of the demand for CoCos in recent years has come from private banks and retail investors, especially in Europe and Asia, along with big U.S. institutional investors who were attracted by the higher yields in the low-interest-rate environment that prevailed from the crisis until the Federal Reserve started raising interest rates last year.
    

    To be sure, the Credit Suisse CoCos were showing signs of stress last week as the bank became more embroiled in crisis. The bank’s 9.75% coupon CoCo bonds due June of 2028 were trading at an average price of 36 cents on the dollar last Wednesday, as MarketWatch’s Joy Wiltermuth reported.
    

    Now fund managers say investors are likely to avoid them, undermining their use for banks.
    

    “The UBS-CS deal might have avoided an immediate risk event, but the AT1 write down has added an uncertainty which could persist for weeks if not months,” said Mohit Kumar, chief financial economist in Europe at Jefferies.
    

    “Given the large amount of AT1s outstanding, this would also raise the prospect of losses for other investors and the ability of banks to use them as a funding source in the future,” he added.
    

    

    


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  • 
		
		
    
			
    Credit Suisse shares slump by two-thirds after UBS deal
    
			
    Credit Suisse shares slump by two-thirds after UBS deal
    
			
    

    

    Credit Suisse shares dropped as much as 65% on Monday after the struggling Swiss bank agreed to be taken over by its rival UBS at a steep discount.
    

    The decline in Credit Suisse’s shares
    
        CSGN,
    
        -54.25%
    

            CS,
    
        -52.61%
    
       mostly reflected the 59% discount it agreed to take in the deal initially valued at 3 billion francs, but also reflected the slide in UBS shares
    
        UBSG,
    
        +4.21%
    

            UBS,
    
        +4.48%
    
       after the transaction was announced.
    

    

    UBS shares in the afternoon were trading 5% lower, as investors balanced the risks of absorbing Credit Suisse with the future profit potential. UBS expects the deal to lift earnings by 2027 and points out it would have some $5 trillion in invested assets.
    

    The Euro Stoxx banks index
    
        SX7E,
    
        +0.97%    ,
    
       which doesn’t include UBS or Credit Suisse, fell 1% in see-saw trade.
    

    Among the worries that stem from the deal was that the Swiss government wrote down the value of what are called AT1 bonds to zero. These bonds, also called contingent convertible bonds or CoCos, have been a key funding source for European banks. 
    

    The Invesco AT1 capital bonds ETF dropped 14%.
    

    “It has become harder to assess the attractiveness of the current historically large spread pick-up provided by AT1 bonds vs. their [high-yield] corporate counterparts, which will likely constrain the appetite towards the AT1 asset class,” said analysts at Goldman Sachs.
    

    

    


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  • 
		
		
    
			
    Norway’s Oil Fund Has Roughly 1.49% Stake in Credit Suisse, No AT1 Bond Exposure
    
			
    Norway’s Oil Fund Has Roughly 1.49% Stake in Credit Suisse, No AT1 Bond Exposure
    
			
    

    

    By Dominic Chopping
    

    Norway’s sovereign wealth fund had a 1.49% stake in Credit Suisse Group AG at the end of 2022 and a 3.31% stake in UBS Group AG, holdings that remain “approximately unchanged,” it said Monday.
    

    UBS yesterday agreed to take over Swiss rival Credit Suisse for more than $3 billion as regulators pushed for the deal in an effort to calm declining confidence in the global banking system.
    

    

    Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares held, but holders of around $17.3 billion of additional tier 1 bonds, or AT1s, will receive nothing.
    

    Norges Bank Investment Management, the arm of Norway’s central bank that manages the sovereign-wealth fund, commonly known as the oil fund, said that it doesn’t hold any Credit Suisse AT1 bonds.
    

    Write to Dominic Chopping at dominic.chopping@wsj.com
    

    

    


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  • 
		
		
    
			
    Here’s why UBS’s deal to buy Credit Suisse matters to U.S. investors
    
			
    Here’s why UBS’s deal to buy Credit Suisse matters to U.S. investors
    
			
    

    Thousands of miles away from U.S. shores last Wednesday, a headline began working its way across Europe, then Wall Street, sparking fresh panic as it dawned on investors that they may be facing yet another banking crisis. 
    

    Shares of Credit Suisse
    
        CS,
    
        -6.94%
    

            CSGN,
    
        -8.01%
    
       would eventually sink 25% last week to a fresh record low, unable to find footing days after the head of top shareholder Saudi National Bank said they won’t invest any more in the bank. By Sunday, the struggling Swiss bank had a new owner, leaving investors to wonder if at least one chapter in a current roller coaster of global banking stress can be closed. 
    

    

    Swiss authorities steered rival UBS AG
    
        UBS,
    
        -5.50%
    
       to an all-stock deal worth 3 billion francs ($3.25 billion), or 0.76 francs per share, a not-so-slight discount to the 1.86 franc close on Friday of Credit Suisse. So important was the agreement, it was announced by Switzerland’s President Alain Berset, with both banks and the chairman of the Swiss National Bank on either side of him.
    

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the SNB said in a statement.
    

    The Swiss National Bank said either Swiss bank can borrow up to 100 billion francs in a liquidity assistance loan, and Credit Suisse will get a liquidity assistance loan of up to 100 billion francs, backed by a federal default guarantee. The U.S. Federal Reserve had worked with its Swiss counterpart on the deal as well.
    

    “We welcome the announcements by the Swiss authorities today to support financial stability. The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient,” said a statement Sunday by Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell. 
    

    European Central Bank President Christine Lagarde also praised Swiss authorities for “restoring orderly market conditions and ensuring financial stability,” while reiterating the “resilience” of the euro-area banking sector. She said the ECB stands ready to provide liquidity if needed.
    

    Her comment comes days after the the ECB pulled the trigger Thursday on a 50-basis-point rate hike, as it warned “inflation is projected to remain too high for too long.” 
    

    The deal for Credit Suisse comes in the wake of stress on the U.S. banking sector, triggered by the collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank, all within the space of a week. 
    

    “Virtually everyone at this high-level Swiss press conference — government officials, regulator, central bank governor, and executives of the two banks — blamed the US banking sector turmoil for being the catalyst for the financial turmoil in #Switzerland,” tweeted Mohamed A. El-Erian, chief economic adviser at Allianz, of the press conference Sunday with Swiss authorities to announce the deal.
    

    And for U.S. investors who have had quite enough anxiety lately,  a logical question would be to ask if the deal that brings together the two Swiss banking giants will now remove one layer of stress from global markets, and hence Wall Street. 
    

    For that reason, many will be watching how Asian and U.S. equity futures trade later on Sunday, as well as Europe’s opening reaction on Monday.
    

    The Credit Suisse news may only go so far to assuage investors, with some raising an eyebrow over Powell and Yellen’s Sunday statement about the Swiss deal. “Seriously, if everyone truly believed the ‘The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient’ … Would they have to tell us? Are these words enough?” said Jim Bianco, president of Bianco Research, on Twitter. “Or do investors want to see Warren Buffett writing checks to regional banks in the next two hours (before Asia opens)?” 
    

    Fox News and other media outlets reported over the weekend that the Berkshire Hathaway
    
        BRK.A,
    
        -2.76%
    

            BRK.B,
    
        -2.81%
    
       chairman and CEO had been talking to President Joe Biden’s administration in recent days over possible investments in the battered regional bank sector, and offering his advice. 
    

    The billionaire investor was responsible for a capital injection to Bank of America
    
        BAC,
    
        -3.97%
    
       in 2011 as its shares tumbled due to subprime mortgages, as well as $5 billion to Goldman Sachs
    
        GS,
    
        -3.67%
    
       amid the 2008 financial crisis.
    

    Some had said ahead of the deal last week that global-market stability depended on the Swiss first getting their house in order. 
    

    “I don’t think there are any direct consequences for U.S. investors, but it’s extremely negative for sentiment if a major Swiss bank fails, hot on the heels of SVB/SBNY,” Simon Ree, the founder of Tao of Trading options academy school and author of the book by the same name, told MarketWatch last week. 
    

    “The market will be (temporarily) wondering who’s next. It could start to have the optics of a global banking crisis, rather than an idiosyncratic failure of a niche U.S. regional bank,” said Ree. 
    

    Credit Suisse’s troubles came amid a revamp and five straight money-losing quarters, following a painful legacy that included billions worth of exposure to the collapsed Archegos family office and $10 billion worth of funds tied to Greensil Capital it had to freeze.
    

    Read: In its delayed annual report, Credit Suisse admitted to financial control weaknesses
    

    “The SNB and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland’s reputation as a financial center,” said Otavio Marenzi, CEO  of Opimas, a management consulting firm focused on global capital markets, in a note to clients last week.
    

    The bank’s plummeting stock price and soaring bond yields was “mimicking Silicon Valley Bank’s recent collapse in a frightening way. In terms of the outflow of deposits, Credit Suisse’s position looks even worse,”  said Marenzi.
    

    Over there?
    

    As far as some are concerned, the market may have more stress ahead of it. 
    

    “The SVB failure highlights the potential for other skeletons to be hidden in closets and the market will spend the next few weeks/months hunting them out. Even just the extreme volatility we’ve seen on bond markets the last five days renders any attempt to ascribe a value to other asset classes redundant,” said Ree. 
    

    Plus: Here’s what’s really protecting your bank deposits
    

    His view is shared by many analysts, who in part point to increasing uncertainty around how the Federal Reserve will react going forward as it tries to balance market and economic risks. Some now see full percentage rate cuts by year-end, amid banking stress.
    

    Samantha LaDuc, the founder of LaDucTrading.com who specializes in timing major market inflections, said she stands by her advice (that she shared with MarketWatch in February) that investors are being “paid to wait,” by staying in cash.
    

    Read: Looking for a place for your cash? Grab these 5% CDs while you still can.
    

    “I have been literally recommending and tweeting to clients that we are PAID TO WAIT in T-bills at 5% until [the] bond market can figure out if we have recession or not. All that happened last week pulled forward recession risk,” she told MarketWatch. 
    

    Prior to the SVB crisis, she had been recommending clients short reflation trades, such as banks
    
        XLF,
    
        -3.22%
    

            KRE,
    
        -5.99%    ,
    
       energy
    
        XLE,
    
        -1.57%
    
       and metals and mining
    
        XME,
    
        -0.78%
    

            COPX,
    
        +0.63%
    

            SLX,
    
        -1.96%    ,
    
       and has been saying she sees “unattractive risk-reward for either stocks or bonds.” 
    

    Opimas’ Marenzi said the threat to Wall Street from Credit Suisse was simple:
    

    “You mean what do American investors who do not own any non-American stocks and do not own a passport and could not find Switzerland on a map and who think that anyone who speaks any language other than English is a bit weird have to worry about? Not a lot, other than the contagion spreading back into the US banking system and causing a meltdown,” he told MarketWatch.
    

    

    


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  • 
		
		
    
			
    UBS to buy Credit Suisse for more than $3 billion in deal backed by Swiss government
    
			
    UBS to buy Credit Suisse for more than $3 billion in deal backed by Swiss government
    
			
    

    

    Struggling Swiss banking giant Credit Suisse has agreed to be bought by its arch-rival UBS at a discount to Friday’s close price, after seeing a wave of customer deposits exit the bank.
    

    The deal was announced by Switzerland’s president, Alain Berset, flanked by executives from both banks and the chairman of the Swiss National Bank. 
    

    

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the SNB said in a statement.
    

    UBS
    
        UBS,
    
        -5.50%
    
       will buy Credit Suisse
    
        CS,
    
        -6.94%
    
       for 3 billion francs ($3.25 billion), or 0.76 francs per share, in an all-stock deal, the bank announced.
    

    That compares to Credit Suisse’s
    
        CSGN,
    
        -8.01%
    
       closing price of 1.86 francs on Friday. The FT reported UBS initially bid just 0.25 francs per share.
    

    UBS said it benefits from 25 billion francs of downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets.
    

    The deal does not need shareholder approval. The Swiss financial regulator said Credit Suisse’s AT1 securities, worth 16 billion francs, will be entirely written down.
    

    

    

    

    Credit Suisse chairman Axel Lehmann (L) and UBS Chairman Colm Kelleher (R) look on prior to a press conference.
    

          
    
            fabrice coffrini/Agence France-Presse/Getty Images
    
          
    
  
    

    

    “This is a commercial solution and not a bailout,” said Karin Keller-Sutter, the Swiss finance minister. “Bankruptcy would have been the highest risk.”
    

    The Swiss National Bank said either UBS or Credit Suisse can borrow up to 100 billion francs in a liquidity assistance loan, and Credit Suisse can also receive a liquidity assistance loan of up to 100 billion francs. backed by a federal default
    guarantee.
    

    The Federal Reserve has been working with its Swiss counterpart on the deal, as both banks have major operations in the U.S. 
    

    Keller-Sutter said she held talks with U.S. Treasury Secretary Janet Yellen and U.K. Chancellor Jeremy Hunt. Keller-Sutter said “many thousands” of Credit Suisse will be affected, pointing to job cuts ahead.
    

    UBS said the combination of the two businesses is expected to generate annual run-rate of cost reductions of more than $8 billion by 2027. UBS Chairman Colm Kelleher said the investment bank will represent no more than 25% of risk-weighed assets.
    

    Credit Suisse’s downfall occurred just days after the collapse of U.S. banks SVB Financial and Signature Bank. While Credit Suisse, as well as Swiss authorities, said they didn’t have the same kinds of problems, they also saw customers leave. After wealthy clients withdrew roughly $100 billion from Credit Suisse in the fourth quarter, they again began to see big outflows last week, the FT reported.
    

    Credit Suisse has lost money for five consecutive quarters, reeling from losses to family office Archegos as well as having to freeze $10 billion of supply chain funds sold through the bank that were managed by Greensill Capital. 
    

    Also read: Saudis, Qataris and Norway to see big losses on UBS deal for Credit Suisse
    

    

    


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  • 
		
		
    
			
    UBS Said to Offer $1 Billion for Credit Suisse. Here’s Why It Matters.
    
			
    UBS Said to Offer $1 Billion for Credit Suisse. Here’s Why It Matters.
    
			
    

    

    
        
    
          
    
            UBS
    
          
    
        
    
       Group has offered to buy Credit Suisse Group for up to $1 billion, the Financial Times reported on Sunday. 
    

    The report said regulators are rushing to complete a deal for
    
        
    
          
    
            Credit Suisse
    
          
    
        
    
       (ticker: CS) before financial markets open on Monday. A merger of Switzerland’s two largest banks comes against a backdrop of industry turmoil. The potential end of the storied bank shows how far and how quickly worries have spread about the financial sector.
    

    


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  • 
		
		
    
			
    U.S. stocks end lower, Dow books back-to-back weekly losses as banking sector stress reemerges
    
			
    U.S. stocks end lower, Dow books back-to-back weekly losses as banking sector stress reemerges
    
			
    

    

    U.S. stocks ended lower Friday as worries about banking-sector stability reemerged following a bankruptcy filing by SVB Financial Group and the release of data showing banks borrowed $165 billion from the Federal Reserve over the past week. 
    

    How stocks traded
    

      

    • 
      The Dow Jones Industrial Average
      
        DJIA,
      
        -1.19%
      
       fell 384.57 points, or 1.2%, to close at 31,861.98. 
      

      • 

    • 
      The S&P 500
      
        SPX,
      
        -1.10%
      
       dropped 43.64 points, or 1.1%, to finish at 3,916.64. 
      

      • 

    • 
      The Nasdaq Composite
      
        COMP,
      
        -0.74%
      
       slid 86.76 points, or 0.7%, to end at 11,630.51, snapping a four-day win streak. 
      

      • 

    

    For the week, the Dow fell 0.1%, the S&P 500 gained 1.4% and the Nasdaq climbed 4.4%, according to Dow Jones Market Data.  The Dow booked back-to-back weekly losses while the Nasdaq saw its biggest weekly percentage gain since January.
    

    

    What drove markets
    

    U.S. stocks fell Friday as worries about the banking sector persisted.
    

    “The markets are up and down all this week, and they’re moving typically in big amounts, because there really isn’t any consensus on how the strains in the banking system will play” into the economy, said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, in a phone interview Friday. Investors are trying to get a sense for how quickly the economy may be slowing and whether the problems in the banking sector will lead to an “accelerated slowing,” he said.
    

    Concerns about the banking sector’s ability to withstand deposit flight reemerged Friday morning after SVB Financial Group
    
        SIVB,
    
        -60.41%
    
       announced it had filed for Chapter 11 bankruptcy protection. SVB is the holding company of Silicon Valley Bank , which was put into FDIC receivership last Friday. 
    

    On Thursday, First Republic Bank announced that  it would receive $30 billion of uninsured deposits from a group of large U.S. banks. JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. were among the 11 banks that agreed to provide the deposits.
    

    Meanwhile, Federal Reserve data released Thursday afternoon in New York showed banks borrowed a combined $165 billion from the central bank. Most of the borrowing occurred via the Fed’s discount window. But a small amount was also tapped through the Fed’s new Bank Term Funding Program that allows bonds trading at a discount to be used as collateral, at par value.  The fact that borrowing through the discount window has soared to a record high was adding to the market’s concerns about the banking sector, analysts said. 
    

     See: Banks have borrowed $165 billion from the Fed in past week after SVB failure 
    

    First Republic Bank
    
        FRC,
    
        -32.80%
    
       shares plunged 32.8% Friday, while Credit Suisse Group
    
        CS,
    
        -6.94%    ,
    
       which earlier this week got a lifeline from the Swiss National Bank, closed 6.9% lower, according to FactSet data. 
    

    At least four major banks have put restrictions on trades that involve troubled Swiss lender Credit Suisse Group or its securities, Reuters reported Friday, citing people with direct knowledge of the matter.
    

    “I think there are still a lot of questions right now,” said Mark Luschini, chief investment strategist at Janney, during a phone interview with MarketWatch. “Investors can’t seem to hold their enthusiasm for equities for longer than a 24-hour news cycle.”
    

    It’s not hard to understand why investors are still so anxious about the banking sector given the surge in borrowing from the Fed, said Matt Maley, chief market strategist at Miller Tabak + Co.
    

    “Given that banks borrowed over $150bn at the Fed’s discount window on Wednesday, which compares to $4.4bn the week before, one can understand why investors are worried that the situation might be a bit more dire than the authorities are admitting to right now,” Maley said in emailed commentary. 
    

    In economic news, the Conference Board said Friday that the U.S. leading economic index fell 0.3% in February, marking the 11th straight monthly decline. U.S. industrial production was flat in February, data released Friday by the Fed show.
    

    Meanwhile, the University of Michigan’s latest reading on consumer sentiment showed consumers were more downbeat in March than at ay time in the last four months. 
    

    While stocks fell Friday, they finished the week mostly higher. The Dow Jones Industrial Average slipped 0.1% for the week, while the S&P 500 booked a 1.4% weekly gain and the technology-heavy Nasdaq Composite saw a weekly rise of 4.4%, according to Dow Jones Market Data. 
    

    Companies in focus
    

      

    • 
      FedEx Corp.’s stock 
      
        FDX,
      
        +7.97%
      
       jumped 8% after beating analyst estimates in its fiscal third-quarter earnings. The shipping firm also lifted its profit forecast for the full fiscal year.
      

      • 

    • 
      Shares of PacWest Bancorp 
      
        PACW,
      
        -18.95%
      
       and Western Alliance Bancorp 
      
        WAL,
      
        -15.14%
      
       tumbled as regional banks continued to face pressure, with PacWest falling almost 19% and Western Alliance dropping 15.1%. 
      

      • 

    • 
      Shares of Microsoft Corp. 
      
        MSFT,
      
        +1.17%
      
       rose 1.2% as analysts saw the latest iteration of Chat GPT giving the tech giant an even greater edge. In other megacap tech names, Alphabet Inc.’s Class A
      
        GOOGL,
      
        +1.30%
      
       shares gained 1.3% while semiconductor giant Nvidia Corp. 
      
        NVDA,
      
        +0.72%
      
       advanced 0.7%.
      

      • 

    

    —Steve Goldstein contributed to this report.
    

    

    


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  • 
		
		
    
			
    Credit Suisse shares jump after saying it will borrow from SNB and buy back debt
    
			
    Credit Suisse shares jump after saying it will borrow from SNB and buy back debt
    
			
    

    

    

    Credit Suisse shares surged 32% in opening trade, rallying as the Swiss banking giant said it will tap its central bank for 50 billion francs ($54 billion) and launching an offer to buy beaten-up debt.
    

    While the stock CH:CSGN CS did get halted for volatility and came off those highs, it demonstrated that the action helped stave off some of the pressures building around the bank, which has lost money for five consecutive quarters.
    

    Other…
    
    

    

    


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  • 
		
		
    
			
    Credit Suisse to delay publication of 2022 annual report on SEC comments
    
			
    Credit Suisse to delay publication of 2022 annual report on SEC comments
    
			
    

    

    Credit Suisse Group AG said Thursday that it will delay the publication of its 2022 report after a late call from U.S. market regulators over 2019 and 2020 cash-flow statements, adding a further headache as the lender attempts to woo back clients amid a costly turnaround effort.
    

    The Swiss bank
    
        CSGN,
    
        -5.57%
    

            CS,
    
        +0.35%
    
       said it received a call from the U.S. Securities and Exchange Commission on Wednesday in relation to certain open SEC comments about the technical assessment of previously disclosed revisions to its consolidated cash-flow statements in the 2020 and 2019 fiscal years as well as related controls.
    

    

    “Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received,” Credit Suisse said.
    

    The company said it wouldn’t affect its 2022 financial results released early in February.
    

    Credit Suisse’s share price hit a low in the weeks since the 2022 results on uncertainty about its future, with analysts fearing that recent large outflows from customers will hinder a recovery.
    

    Write to Ed Frankl at edward.frankl@wsj.com
    

    

    


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  • 
		
		
    
			
    Saudi crown prince set to invest in Credit Suisse’s new investment bank
    
			
    Saudi crown prince set to invest in Credit Suisse’s new investment bank
    
			
    

    

    Saudi Arabia’s crown prince and a U.S. private-equity firm run by Barclays PLC’s  former chief executive are among investors preparing to invest $1 billion or more into Credit Suisse’s
    
        CSGN,
    
        +6.61%
    

            CS,
    
        +9.39%
    
       new investment bank, people familiar with the matter said. 
    

    Crown Prince Mohammed bin Salman is considering an investment of around $500 million to back the new unit, CS First Boston, and its CEO-designate, Michael Klein, some of the people said. Additional financial backing could come from U.S. investors including veteran banker Bob Diamond‘s Atlas Merchant Capital, people familiar with that potential investment said. Credit Suisse previously said it had $500 million committed from an additional investor it hasn’t named.  
    

    

    Credit Suisse has received a number of proposals from investors interested in CS First Boston. Credit Suisse Chairman Axel Lehmann at a conference on Thursday said it has other firm commitments in addition to the $500 million from the unnamed investor. The bank hasn’t received a formal proposal from any Saudi entity, some of the people familiar with the matter said. 
    

    Credit Suisse is spinning off the New York-based investment bank as part of a fresh start after being buffeted by scandals, regulatory scrutiny and steep losses. It is raising $4.2 billion in new stock that separately will make Saudi National Bank its largest shareholder. It isn’t clear if Prince Mohammed would make the investment through that bank, or another investment vehicle. He is chairman of the country’s sovereign-wealth fund, Public Investment Fund, which along with another government fund is Saudi National Bank’s main owner. 
    

    An expanded version of this report appears on WSJ.com.
    

    Also popular on WSJ.com:
    

    Apple makes plans to move production out of China.
    

    FTX founder Sam Bankman-Fried says he can’t account for billions sent to Alameda.
    

    

    


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  • 
		
		
    
			
    Credit Suisse shares tumble after flagging $1.6 billion 4Q loss amid strain for wealth management comes
    
			
    Credit Suisse shares tumble after flagging $1.6 billion 4Q loss amid strain for wealth management comes
    
			
    

    

    Credit Suisse Group AG shares tumbled in Wednesday morning trading after the bank said asset outflows at its wealth-management business would lead to a fifth consecutive quarterly loss.
    

    Shares
    
        CS,
    
        -1.45%
    

            CSGN,
    
        -4.64%
    
       at 0830 GMT were down 4.9% to CHF3.66.
    

    

    The Swiss lender said it expects to post a loss before taxes of around 1.5 billion Swiss francs ($1.58 billion) in the fourth quarter, after lower deposits and assets under management led to reduced commissions and fees.
    

    The bank, Switzerland’s second-largest by assets, said that it net-asset outflows in the quarter to Nov. 11 were around 6%, or $88.3 billion of its total $1.47 trillion assets under management.
    

    At the bank’s wealth-management arm, its key business serving the world’s rich, customers removed $66.7 billion.
    

    It came after the Zurich-based company experienced deposit and net-asset outflows in the first two weeks of October, it said, after social-media reports and a spike in credit-default swaps caused a frenzy over the bank’s financial position.
    

    The bank said the outflows led its liquidity to fall below some local-level legal requirements, but it maintained its required group-level liquidity and funding ratios at all times.
    

    Write to Ed Frankl at edward.frankl@dowjones.com
    

    

    


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  • 
		
		
    
			
    Credit Suisse makes $2.98 billion debt-repurchase offers
    
			
    Credit Suisse makes $2.98 billion debt-repurchase offers
    
			
    

    

    Credit Suisse Group AG said Friday that it is offering to repurchase debt securities for a total of close to $3 billion as the troubled lender looks to manage its liabilities ahead of a touted restructuring.
    

    The Swiss bank
    
        CS,
    
        +1.66%
    

            CSGN,
    
        +3.13%
    
       is offering to buy back eight euro- or pound sterling-denominated senior debt securities for a total of up to 1 billion euros ($979.2 million,) it said.
    

    

    It is also offering to buy back 12 U.S. dollar-denominated securities for up to $2 billion. Both offers are subject to various conditions and will expire on Nov. 3 and Nov. 10, respectively, Credit Suisse said.
    

    The value of some Credit Suisse bonds fell at the beginning of this week alongside shares in the lender amid speculation over its financial health. The bank has moved to reassure investors ahead of a planned strategy update due on Oct. 27 alongside quarterly results.
    

    Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
    

    

    


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