Credit Suisse announced on Thursday that it would borrow up to 50 billion francs from the Swiss National Bank (SNB) to “strengthen” the group, whose title collapsed on the stock market. The group thus seizes the hand extended by the SNB.
The bank has, at the same time, announced a series of debt buyback operations for around 3 billion francs.
“These steps are a decisive move to strengthen Credit Suisse as we continue our strategic transformation to bring value to our clients and other stakeholders,” Zurich banking group chief executive Ulrich Koerner said. in a press release.
This announcement comes following the SNB reached out to Credit Suisse, in the midst of market turmoil. The Swiss central bank announced on Wednesday that it will make cash available to the group ‘if needed’.
vertiginous fall
That same day, the title of the number two Swiss bank fell 24.24% at the close. The group, one of 30 banks in the world considered too big to fail, was worth just under 6.7 billion francs on the stock market.
This vertiginous fall began following declarations by the president of the Saudi National Bank, the largest shareholder of Credit Suisse, excluding injecting more money into the group, mainly for regulatory reasons. On Tuesday, the bank acknowledged “substantial weaknesses” in its internal controls.
Founded in 1856, Credit Suisse is a pillar of the Swiss financial center, but it has been in turmoil since the bankruptcy of the British financial company Greensill, which marked the start of a series of scandals that weakened the bank. Since March 2021, the stock has lost more than 83% of its value. Investors are also worried regarding the risk of contagion following the bankruptcy of the American bank SVB.
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