Credit Suisse sinks around 30% – 03/15/2023 – Market

Credit Suisse fell about 30% on Wednesday (15), renewing historic lows, after its biggest investor said it could not provide the Swiss bank with more financial assistance due to regulatory issues.

“We can’t because we would go above 10%. It’s a regulatory issue,” said Saudi National Bank chairman Ammar Al Khudairy.

The Saudi bank acquired a slice of almost 10% last year after participating in the capital increase of Credit Suisse and committed itself to investing up to 1.5 billion Swiss francs (US$ 1.5 billion, R$ 7.8 billion ) at the institution.

The fall in Credit Suisse shares put pressure on stock markets in general, as it reignites some of the nervousness among investors about the resilience of the global banking system after the collapse of the North American SVB (Silicon Valley Bank) at the end of the week. .

Speaking at a Morgan Stanley conference on Wednesday, Ralph Hamers, CEO of Swiss rival UBS, said the bank had benefited from the recent market turmoil and had seen cash inflows.

“Over the past few days, as you might expect, we’ve seen inflows,” Hamers said. “It’s clearly a flight to safety, but I think three days is not a trend.”

Credit Suisse on Tuesday published its 2022 annual report saying the bank had identified “material weaknesses” in controls over financial reporting and that customer outflows were not yet over.

Switzerland’s second-largest bank is trying to recover from a series of scandals that have undermined investor and customer confidence. Customer outflows in the fourth quarter rose to more than CHF 110 billion ($120 billion).

Credit Suisse shares were trading at 1.60 Swiss francs, down 28.44% at around 9:45 am (Brasília time), coming from a sequence of losses. At their worst, they reached 1.57 Swiss francs.

The cost of insuring the bank’s bonds against default soared. The five-year CDS on Credit Suisse debt increased to 574 basis points from 549 bps at the last close, according to data from S&P Global Market Intelligence, marking a new record.

Earlier this week, Credit Suisse CEO Ulrich Koerner told a conference that the bank’s liquidity coverage ratio averaged 150% in the first quarter of this year — well above regulatory requirements.