Credit Suisse shares slump over 61% in premarket trading after UBS deal

LONDON/ZURICH (Reuters) – 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.” 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.

($1 = 0.9274 Swiss francs)

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