Credit Suisse’s top management are under pressure to overhaul the scandal-hit Swiss bank and a merger with rival UBS may be on the cards.
Reuters today reported that three people familiar with the bank’s thinking are concerned that it could be challenged by investors demanding its break-up.
This has led the sources to believe that a new strategic direction could include seeking a merger with Swiss bank UBS.
There are also fears that Credit Suisse’s shrinking stock market value makes it a target for a foreign hostile takeover, according to the report.
The bank has seen its share price plummet since the Archagos meltdown, where Credit Suisse took a $5bn hit.
The Greensill Capital collapse, which was triggered when it suspended $10bn in funds used by the supply chain finance firm, also impacted.
The bank’s new chairman, former Lloyds boss Antonio Horta-Osorio, announced a strategic review in late April, telling investors he would take time in reaching tough decisions that lay ahead.
“Credit Suisse needs a merger deal right away,” a person with knowledge of the bank’s thinking told Reuters.
“There is growing concern in Zurich that activist investors will go after them if they stand still.”
A merger between Credit Suisse and UBS would create a bank with more than 110,000 employees and a market value of over $8.5bn.
Following today’s report, shares in Credit Suisse rose by 1.6 per cent. Both companies declined to comment on the matter.