FRANKFURT (dpa-AFX Broker) - The "emergency rescue" of the seriously troubled Credit Suisse by UBS has not been able to smooth the waters in the banking sector on Monday. Worries about a conflagration persist. In particular, the looming total default of certain billion-dollar bonds of the major Swiss bank weighed heavily in part on the prices of banks and insurers. For this reason, numerous sector stocks in Asia had already come under pressure before. Meanwhile, the European Central Bank (ECB) said that the European banking sector was resilient.

The index of the European banking sector, the Stoxx Europe 600 Banks, recently lost 2.4 percent, having previously slumped to a low since mid-November with a loss of over 5 percent at times. In the previous week, the sector barometer had already lost 11.5 percent in the wake of the crisis at U.S. regional banks and uncertainty about the future of Credit Suisse.

Still at the end of February, the index had climbed to its highest level since 2018 in the interest rate turnaround. Since the interim high, the minus now adds up to almost a fifth. For the shares of Credit Suisse, the price disaster continued, they slid again by two-thirds to another record low. In the meantime, one share is not even worth one franc. UBS shares recently lost 5 percent after falling 16 percent.

Thus, the rescue of the Swiss bank, which was negotiated in a long marathon of negotiations over the weekend, failed to have its intended signal effect on the market as a reassurance for the financial markets.

Konstantin Oldenburger of broker CMC believes it is only too understandable that investors are in turmoil given the turmoil in the Swiss banking market, which was once thought to be safe. "Before the weekend, all official bodies were still acting with conviction as if everything was under control," he wrote. But now, with UBS's takeover of Credit Suisse and new monetary support measures from the U.S. Federal Reserve, "events are overlapping to suggest exactly the opposite to investors."

UBS is taking over its smaller local rival for three billion francs (just over 3 billion euros). In addition, it is liable for losses of up to five billion francs. In addition, there is a government loss guarantee of 9 billion francs and liquidity commitments of up to 200 billion francs. In addition, six major central banks, including the European Central Bank and the U.S. Fed, increased their stroke rate to provide dollar liquidity to the financial system.

Oldenburger's CMC colleague Michael Hewson pointed out that some Credit Suisse bondholders are now facing huge losses. Subordinated bonds, known as AT1 bonds, are defaulting. Deutsche Bank meanwhile stated that it had "almost zero" investment in these securities. A price slide of at times almost eleven percent could not be avoided here either, the last time a minus of more than three percent was recorded here. Commerzbank shares lost similarly strongly, but the bank has no investment in AT1 bonds. Allianz shares fell by one percent.

RBC expert Anke Reingen, referring to the takeover, which was apparently also pushed through by politicians and regulators, wrote that while it was "unlikely that UBS would prefer this path, it seems to have been a necessary step, not only for Swiss banks, but for the entire global banking sector."

What this means for UBS shares, however, remains controversial among analysts for the time being: to Reingen, for example, the acquisition appears attractive in the longer term. And Bofa analyst Alastair Ryan immediately upgraded UBS; he sees considerable synergy potential and therefore now recommends buying the securities.

France's Societe Generale, on the other hand, removed its buy recommendation, and analysts at Keefe, Bruyette & Woods also downgraded UBS stock from "market perform" to "underperform." The concerted action takes away the market's concern about contagion effects for the time being, and given the low purchase price, it could turn into a promising deal, argued industry expert Thomas Hallett . For the time being, however, the transaction brings a lot of uncertainty./tav/ag/stk