LONDON/ZURICH: Shares in Credit Suisse dropped 61.95% in premarket trading in Zurich on Monday after rival UBS agreed at the weekend to take over the 167-year old bank for $3 billion.
Credit Suisse shares were quoted at 0.61 Swiss francs ($0.6578) in Julius Baer premarket trading, while those in UBS were down 4.73% at 15.81 francs.
“The next few hours of trading will give us a better picture on whether the crisis is contained,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said.
“In theory, there is no reason for the Credit Suisse crisis to extend, as what triggered the last quake for Credit Suisse was a confidence crisis – which doesn’t concern UBS - a bank outside of the turmoil, with, in addition, ample liquidity and guarantee from the SNB and the government.”
UBS agrees to buy Credit Suisse as global regulators assure markets
SNB refers to the Swiss National Bank. In a package orchestrated by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses.
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