The reassuring words of the two most senior executives of Credit Suisse on the financial strength of the banking giant failed to convince investors who inflicted on the action of the bank the worst fall in its history.
At the close, the title showed -24.24% and the bank was only worth a little less than 6.7 billion Swiss francs (6.8 billion euros) on the stock market. A straw for one of the 30 banks around the world considered too big to fail.
Perceived as the weak link in Switzerland, the establishment saw its share price drop by up to 30% to reach a new historic low at 1.55 Swiss francs despite the intervention of its president, Axel Lehmann and his director. General Ulrich Körner to try to straighten things out.
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”.
“We meet and exceed virtually all regulatory requirements,” he added, adding that “our capital, our liquidity base is very, very strong.”
Its president, Axel Lehmann had assured for his part that the bank did not need government aid, also citing “solid financial ratios”.
This was not enough to convince and the financial authorities and the Swiss government chose to remain silent throughout the day.
But according to the Financial Times, neither the Swiss central bank nor the market watchdog responded to requests from Credit Suisse to make a gesture of support.
However, the concern goes beyond the borders of the Alpine country and the American Treasury said “to monitor the situation and to be in contact with its international counterparts”.
In France, Prime Minister Elisabeth Borne publicly called on the Swiss authorities to settle the bank’s problems and indicated that her finance minister would speak to her Swiss counterpart again today.
This vertiginous fall began after 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.
In an interview with Reuters, Mr. al-Khudairy said he was “very happy” with Credit Suisse’s restructuring program, referring to a “very solid” bank.
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.
“The pressure on Credit Suisse has hit an already nervous market,” Rabobank analyst Jane Foley told AFP.
The new shareholder’s statements struck a chord as investors worried about the risk of contagion following the collapse of US bank SVB.
“It looks like there are more and more worried investors,” Finalto analyst Neil Wilson said in a market commentary.
But if Credit Suisse were to face “existential problems”, then “we would be facing something of a whole other dimension. It is really too important to let go,” he said. insisted.
Unlike SVB, Credit Suisse is one of 30 banks worldwide considered too big to fail, which imposes stricter regulations on it to be able to withstand the shock in the event of difficulty.
Contacted by AFP, the Swiss Central Bank declined to comment.
Credit Suisse launched a major restructuring program in October in an attempt to recover. But some shareholders ended up throwing in the towel, like the American investment company Harris Associates, long its largest shareholder, which revealed last week that it had completely sold its stake in the bank.
In early February, Credit Suisse disclosed a net loss of 7.3 billion Swiss francs (nearly 7.4 billion euros) for the 2022 financial year against the backdrop of massive withdrawals of funds from its customers and warned still expect a “substantial” pre-tax loss in 2023.
15/03/2023 19:36:38 – Zurich (AFP) – © 2023 AFP
