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UBS shares hit as European banks slide

Tan KW
Publish date: Fri, 24 Mar 2023, 06:09 PM
Tan KW
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 Banking stocks fell again on Friday after a tumultuous week with investors worried that the worst problems in the sector since the 2008 financial crisis were not yet contained.

The index of top European banks fell 2.2% in early trade, with shares in Swiss bank UBS Group AG down 6.4%.

Deutsche Bank was down 5.4% after a sharp jump in the cost of insuring against the risk of default late on Thursday.

After the sudden collapse this month of two US regional banks sparked turmoil in the sector, UBS was rushed into taking over Credit Suisse on Sunday, after the troubled Swiss lender lost the confidence of investors.

Swiss authorities and UBS are racing to close the takeover within as little as a month, according to two sources with knowledge of the plans, to try to retain Credit Suisse’s clients and employees.

Bloomberg News reported that Credit Suisse and UBS are among banks under scrutiny in a US Department of Justice probe into whether financial professionals helped Russian oligarchs evade sanctions.

Credit Suisse and UBS declined to comment, while the Justice Department did not immediately respond to Reuters’ emailed requests for comment.

The falls in European banking stocks followed losses in the US on Thursday, wherein investors were looking to see how far the authorities would go to shore up the sector, particularly fragile regional banks.

For the fourth time in a week, US Treasury secretary Janet Yellen spoke on Thursday, aiming to reassure Americans that the US banking system is safe.

She told US lawmakers that bank regulators and the Treasury were prepared to make comprehensive deposit guarantees at other banks, as they did at failed Silicon Valley Bank and Signature Bank.


  - Reuters


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