Commuters cycle past a Credit Suisse Group AG bank branch in Basel, Switzerland, on Tuesday, Oct. 25, 2022. Credit Suisse will present its third quarter earnings and strategy review on Oct. 27.
Stefan Wermuth | Bloomberg | Getty Images
Shares of Credit Suisse on Wednesday plunged to a fresh all-time low for the second consecutive day after a top investor within the embattled Swiss bank said it might not give you the option to supply any additional cash because of regulatory restrictions.
Trading within the bank’s plummeting stock was halted several times throughout the morning because it fell below 2 Swiss francs ($2.17) for the primary time.
Credit Suisse traded 17% lower at 2:10 p.m. London time (10:10 a.m. ET), paring a few of its earlier losses after dropping greater than 30% at one point.
The share price rout renewed a broader sell-off amongst European lenders, which were already facing significant market turmoil in consequence of the Silicon Valley Bank fallout. A few of the biggest decliners included France’s Societe Generale, Spain’s Banco de Sabadell and Germany’s Commerzbank.
Several Italian banks on Wednesday were also subject to automatic trading stoppages, including UniCredit, FinecoBank and Monte dei Paschi.
Credit Suisse’s largest investor, Saudi National Bank, said it couldn’t provide the Swiss bank with any further financial assistance, in line with a Reuters report, sparking the most recent leg lower.
“We cannot because we’d go above 10%. It is a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters on Wednesday. Nonetheless, he added that SNB is glad with Credit Suisse’s transformation plan and suggested the bank was unlikely to want more money.
The Saudi National Bank took a 9.9% stake in Credit Suisse last yr as a part of the Swiss lender’s $4.2 billion capital raise to fund a large strategic overhaul aimed toward improving investment banking performance and addressing a litany of risk and compliance failures.
Credit Suisse CEO Ulrich Koerner on Wednesday sought to defend the bank’s liquidity basis, saying it’s “very, very strong,” Reuters reported, citing an interview with CAN.
Koerner added, “We fulfill and overshoot mainly all regulatory requirements.”
Meanwhile, chatting with CNBC’s Hadley Gamble during a panel session in Riyadh, Saudi Arabia, on Wednesday morning, Credit Suisse Chairman Axel Lehmann declined to comment on whether his firm would wish any kind of government assistance in the longer term.
When asked if he would rule out some form of assistance, Lehmann answered, “That is not the subject.”
“We’re regulated, now we have strong capital ratios, very strong balance sheet. We’re all hands on deck. In order that’s not the subject by any means.”
‘Material weaknesses’
Investors are also continuing to evaluate the impact of the bank’s Tuesday announcement that it had found “material weaknesses” in its financial reporting processes for 2022 and 2021.
The Swiss lender disclosed the commentary in its annual report, which was initially scheduled for last Thursday but was delayed by a late call from the U.S. Securities and Exchange Commission.
The SEC conversation related to a “technical assessment of previously disclosed revisions to the consolidated money flow statements within the years ended December 31, 2020, and 2019, in addition to related controls.”
In late 2022 the bank disclosed that it was seeing “significantly higher withdrawals of money deposits, non-renewal of maturing time deposits and net asset outflows at levels that substantially exceeded the rates incurred within the third quarter of 2022.”
Credit Suisse saw customer withdrawals of greater than 110 billion Swiss francs within the fourth quarter, as a string of scandals, legacy risk and compliance failures continued to plague it.
Correction: This story has been updated with the proper figure for Credit Suisse’s capital raise.
