UBS share price plunges by 13.5%

By Gokhan Ergocun

ISTANBUL (AA) - The share price of Swiss lender UBS plunged by around 13.5% after purchasing its rival Credit Suisse, which was in deep financial trouble.

The price of UBS shares dropped to 14.81 Swiss francs ($15.94) as of 0845GMT, from 17.20 francs ($18.51) at market close on Friday.

The takeover action was announced by the Swiss government on late Sunday.

In an effort to reduce any risks to UBS, the federal government is also awarding the lender a 9-billion-Swiss-franc ($9.79-billion) guarantee to cover potential losses on certain assets UBS assumes as part of the deal, should any future losses exceed a certain threshold.

Swiss President Alain Berset has asserted that the takeover is the best solution to restore confidence.