UBS is reportedly seeking assurances from the Swiss government that a merger would not lead to a reduction in competition and that the bank would still be able to maintain its independence. The Swiss government has previously expressed concerns about the impact of a potential merger on competition.
Credit Suisse has been under pressure since its involvement in the Archegos Capital Management collapse last year, which resulted in a loss of around $5.5 billion for the bank. The bank has also been dealing with the fallout from the collapse of Greensill Capital, which has resulted in billions of dollars in losses for its clients.
Credit Suisse has been undertaking a major overhaul in the wake of these scandals, with CEO Thomas Gottstein stepping down and being replaced by former UBS executive Ralph Hamers. The bank has also announced plans to cut around 10% of its workforce and restructure its investment banking unit.
A potential merger with UBS could provide a way for Credit Suisse to address its challenges and strengthen its position in the Swiss banking market. However, any merger would likely face regulatory scrutiny and require the approval of the Swiss government.
In addition to the potential merger talks, Credit Suisse is also said to be considering other options, such as a capital raise or the sale of its asset management unit. The bank is expected to provide an update on its strategic plans in April.
Both Credit Suisse and UBS declined to comment on the potential merger talks.
