FTSE 100 banks and oil tumble after Credit Suisse takeover by UBS


Banking stocks on the FTSE 100 and oil and gas prices have tumbled after the historic state-backed rescue of troubled lender Credit Suisse by Swiss rival UBS Group.

In a package orchestrated by Swiss regulators on Sunday, UBS Group will pay 3 billion Swiss francs (£2.7bn) for 167-year-old Credit Suisse and assume up to $5.4bn (£4.4bn) in losses.

However, banking stocks across the FTSE 100 and FTSE 250 plunged as much as 6.2pc after the open, following falls on Asian markets as Credit Suisse bondholders took a massive hit.

The FTSE 100 has since recovered but banking stocks remain lower, with Barclays down 3.7pc, HSBC down 3pc, NatWest down 1.9pc and Lloyds falling 1.2pc.

Shares in UBS plunged as much as 12pc in early trading before clawing back some losses.

Meanwhile, oil prices have sunk to their lowest level in two years as escalating investor concerns about the crisis in global banks eroded appetite for riskier assets such as commodities.

Brent crude, the international benchmark, slumped as much as 3.1pc towards $70 a barrel, where prices have not been since March 2021.

European gas prices have fallen below $40 per megawatt hour for the first time since August 2021 as the banking crisis combined with the end of winter demand.

Under the Credit Suisse deal, the Swiss regulator decided so called additional tier-1 bonds – or AT1 bonds – with a notional value of $17bn will become worthless, creating new worries about the risks of high-yield debt issued by big banks.