Credit Suisse UBS deal: Credit Suisse, one of the oldest banks in Europe, has now been sold. It has been bought by another major Swiss bank, UBS (UBS) for $3.25 billion. The deal was signed late on Sunday evening after talks going on for several days. This deal is being considered as a major development in the context of the current banking crisis. However, as soon as this deal is done, the danger of becoming unemployed is also looming in front of thousands of people.
Biggest victims of the current crisis
The current banking crisis that started from America is showing its effect all over the world. In America, Silicon Valley Bank, Signature Bank, First Republic Bank, Western Pacific Bank etc. have become victims of the current crisis. Although Credit Suisse is the biggest name to be a victim of this crisis. Started 167 years ago, this bank was considered a very prestigious name in the world of banking. This is the reason why not only the government of Switzerland got worried due to Credit Suisse’s crisis, but governments from Britain to America also became alert.
UBS had earlier offered this much
Many governments and authorities started interfering in order that the effect of Credit Suisse’s sinking should not be widespread. In this sequence, another major Swiss bank UBS came forward to buy it. Credit Suisse was under pressure from regulators and authorities to find a quick solution. At the same time, UBS had initially offered only up to $ 01 billion for this deal, which Credit Suisse said was very low. Finally, by Sunday evening, the deal was negotiated and UBS increased the offer to $ 3.25 billion.
still a bargain
However, according to this offer of UBS, it has found this deal very cheap. An all-share deal has been agreed upon between the two banks. According to this, UBS’s old offer of $ 01 billion for Credit Suisse was about $ 0.27 i.e. 0.25 Swiss franc per share. Now that UBS has increased the offer to $3.25 billion, it comes to around 0.81 Swiss francs per share. Credit Suisse’s stock had closed at 1.86 Swiss Franc on Friday last week. That is, still the offer of UBS is more than 1.5 times less than the current share value of Credit Suisse.
so many jobs can go
However, bank regulators of many countries including Switzerland have heaved a sigh of relief from this deal. However, relief for the employees of Credit Suisse is still a long way off. According to the news, thousands of employees of Credit Suisse may have to be unemployed after this deal. UBS says that even before the deal, Credit Suisse was preparing to lay off about 9,000 people. It is certain that these 9 thousand people will be unemployed after the deal. At the same time, it is also being feared that the number of people who are victims of retrenchment can be many times compared to this, because cost cutting has to be done on a large scale.
UBS now has such a plan
According to a Bloomberg report, both UBS and Credit Suisse together currently have around 1.25 lakh employees worldwide. About 30 percent of these people are employed in Switzerland. UBS said in a post-deal statement on Sunday that it plans to reduce the cost of the combined entity by more than $8 billion by 2027. Interestingly, Credit Suisse alone spent more than $16 billion last year. This plan of cost cutting clearly means that the bank’s operations will stop at many places, due to which employees will be fired.
read this also: Crisis over history of more than 165 years, Credit Suisse is getting so much less than the value
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