Credit Suisse announced 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.
On Wednesday, the title Credit Suisse 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. After an astonishing silence, the National Bank (SNB) and the financial regulator Finma assured the group of their support on Wednesday evening.
“Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks. If necessary, the SNB will make liquidity available to Credit Suisse,” the SNB and Finma said in a statement. common aired in the early evening.
Earlier in the day, the two most senior executives of the number two Swiss bank had already tried to reassure on the financial solidity of the banking giant but without succeeding in convincing the investors who inflicted on the action of the bank the worst fall of its history.
Perceived as the weak link, the establishment saw its share price drop by up to 30% to reach a new historic low of 1.55 francs despite the intervention of its president, Axel Lehmann and its general manager Ulrich Körner. to try to raise the bar. For the SNB and Finma, “the current turbulence on the American banking market does not suggest that there is a risk of direct contagion for Swiss establishments”.
In an interview with the Channel News Asia television channel, retweeted by the bank, Ulrich Körner multiplied the reassuring words: “We are a solid bank, we are a bank of global dimension under Swiss regulation”. The managing director of the Swiss entity of Credit Suisse, André Helfenstein, had previously done the same, specifying to the media Blick TV that Credit Suisse “is very well capitalized”.
Abyss
The concern goes beyond the country’s borders and the US Treasury said it was “monitoring the situation and being in contact with its international counterparts”. Investors remained worried Thursday morning, the Asian stock markets opening sharply lower in the wake of the unscrewing the day before of the European places – Paris losing Wednesday evening 3.58% and London 3.83%, signing their worst session since March 2022.
The vertiginous fall of the title began following statements by the president of the Saudi National Bank, the largest shareholder of Credit Suisse. The Saudis came to the rescue of the bank by entering its capital in November. But the Saudi National Bank has “absolutely no” plans to inject more money, mainly for regulatory reasons, said Ammar al-Khudairy, its chairman.
The Saudi National Bank holds a 9.8% stake. But under Swiss law, the market policeman, Finma, should decide if it crossed the 10% threshold. Credit Suisse has been in turmoil since the bankruptcy of the British financial company Greensill, which marked the start of a series of scandals. Since March 2021, the stock has lost more than 83% of its value.
A “completely different world”
“The pressure on Credit Suisse has hit an already nervous market,” Rabobank analyst Jane Foley told AFP. Investors are worried regarding the risk of contagion following the bankruptcy of the American bank SVB.
But if Credit Suisse were to face “existential problems”, then “we would be facing something of a whole other dimension”, underlined Neil Wilson, analyst at Finalto in a market commentary.
Unlike SVB, Credit Suisse is one of 30 global banks considered too big to fail, which imposes stricter regulations on it to be able to withstand the shock in the event of difficulty. Credit Suisse launched a restructuring program in October in an attempt to recover. But some shareholders ended up throwing in the towel. In early February, Credit Suisse announced a net loss of 7.3 billion francs for the 2022 financial year and warned that it still expected a “substantial” pre-tax loss in 2023.
This article has been published automatically. Sources: ats / afp
