The world’s biggest online banking company Credit Suisei is closing in on a deal to acquire rival UBS AG, which could create a bigger bank in the US.
The deal, first reported by Bloomberg News on Monday, would create the world’s second-biggest online bank after JPMorgan Chase & Co., according to people familiar with the matter.
The bank, which has struggled to win over consumers and investors in recent years, will pay UBS $1.2 billion in cash and stock, according to the people, who asked not to be identified because the terms of the deal have not been disclosed.
It will retain a market value of about $2.2 trillion, according the people.
UBS has been the target of a string of probes by regulators and regulators in Europe, where regulators are investigating the bank over alleged fraud.
Credit Suis acquisition is another step in the bank’s path to becoming a dominant force in financial services.
The stock rose more than 7% in premarket trading on Monday.
U.S. regulators in February ordered the bank to pay $13 billion to settle charges that it inflated mortgage loans.
It also agreed to pay a record $2 billion to resolve civil litigation over mortgage-backed securities it sold.
“The bank is not an easy company to deal with,” Mr. Volcker said at a Bloomberg conference.
“We will continue to pursue the most efficient and effective way to address its complex regulatory environment.”
UBS, a unit of UBS Group AG, has long argued that it is not a financial institution and that it cannot be considered a bank.
But UBS’ efforts to bolster its online presence and reach consumers has become a focus for regulators, who have accused the bank of inflating the value of mortgage-related securities.
The $1 billion in capital it will receive from Credit Suises deal will not be subject to restrictions, the people said.
In March, regulators ordered the UBS to pay more than $10 billion in fines to settle civil lawsuits alleging that it helped UBS sell mortgage-linked securities.
“Credit Suisse has demonstrated it has the capability to compete with UBS in the digital and mobile economy, and we will continue our efforts to drive innovation and provide more competitive products to consumers,” the bank said in a statement.
The new deal will be a major win for Credit Suisers new CEO.
“This is the right deal for Credit S. and for UBS.
We are very excited about it and it’s going to help us compete with our rivals,” Mr Vollero said in an interview.
“They are very good.
I am a little bit disappointed because I thought they were very good at the beginning.
I thought the way they were going to do this was the right way.
It’s not what they want to do now.”
Credit Suiser is currently the second-largest online bank, behind UBS’, according to data compiled by Bloomberg.
Its board has included Mr. Vollera, the former head of the bank during its heyday, as well as several former executives.
It is one of several firms that have been exploring the possibility of merging with UB.
“It’s not just the U.K., it’s everywhere,” Mr Volcker told Bloomberg.
“I’m very confident of that.”
The bank has been in talks with several UBS investors, including one with a stake in a company called Fidor, which makes the Swiss-designed electronic-card-reading technology used by bank cards.
The Fidors chief executive, Matthias Litzenberger, declined to comment.
The UBS deal is likely to give Credit Suizen shareholders a greater stake in the company, as its chief executive will be responsible for its operations and will be in charge of the board, the Wall Street people said, asking not to publicly name the people involved.
“Our shareholders will get more power and more control of the company,” Mr Jutels said in March.
The investment in UBS comes after UBS announced a deal with Barclays PLC in April to sell a stake of about 18% in its European operations.
The acquisition will give the bank greater access to markets around the world, according an email obtained by Bloomberg showing that the bank had reached a $500 million transaction in September with UBA, the UBA subsidiary that oversees the UB group of banks.
UB’s purchase of UBA would allow it to focus on its U.N. banking arm and focus on emerging markets, the email said.
The transaction will allow UBS more room to develop and expand into emerging markets such as Brazil, Argentina, South Africa, Malaysia and India.
Mr Volokos credit rating was unchanged at negative, unchanged at stable and negative, and stable at negative outlook.