Posted on 03/15/2023 7:37:52 AM PDT by Red Badger
KEY POINTS
Shares of embattled bank Credit Suisse hit another all-time low for a second consecutive day.
Credit Suisse’s biggest backer, Saudi National Bank, has said it won’t provide further financial help for the bank.
Speaking to 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 need any sort of government assistance in the future.
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Shares of Credit Suisse on Wednesday plunged to a fresh all-time low for the second consecutive day after a top investor in the embattled Swiss bank said it would not be able to provide any more cash due to regulatory restrictions.
Trading in the bank’s plummeting stock was halted several times throughout the morning as it fell below 2 Swiss francs ($2.17) for the first time.
Credit Suisse traded 17% lower at 2:10 p.m. London time (10:10 a.m. ET), paring some of its earlier losses after dropping more than 30% at one point.
The share price rout renewed a broader sell-off among European lenders, which were already facing significant market turmoil as a result of the Silicon Valley Bank fallout. Some 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 could not provide the Swiss bank with any further financial assistance, according to a Reuters report, sparking the latest leg lower.
“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters on Wednesday. However, he added that SNB is happy with Credit Suisse’s transformation plan and suggested the bank was unlikely to need extra money.
The Saudi National Bank took a 9.9% stake in Credit Suisse last year as part of the Swiss lender’s $4.2 billion capital raise to fund a massive strategic overhaul aimed at improving investment banking performance and addressing a litany of risk and compliance failures.
Silicon Valley Bank's collapse a 'warning signal' to banking system: Credit Suisse chairmanWATCH NOW VIDEO02:01 SVB’s collapse a ‘warning signal’ to banking system: Credit Suisse chairman Credit Suisse CEO Ulrich Koerner on Wednesday sought to defend the bank’s liquidity basis, saying it is “very, very strong,” Reuters reported, citing an interview with CAN.
Koerner added, “We fulfill and overshoot basically all regulatory requirements.”
Meanwhile, speaking to 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 need any sort of government assistance in the future.
When asked if he would rule out some kind of assistance, Lehmann answered, “That’s not the topic.”
“We are regulated, we have strong capital ratios, very strong balance sheet. We are all hands on deck. So that’s not the topic whatsoever.”
‘Material weaknesses’ Investors are also continuing to assess 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 observation 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 cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”
In late 2022 the bank disclosed that it was seeing “significantly higher withdrawals of cash deposits, non-renewal of maturing time deposits and net asset outflows at levels that substantially exceeded the rates incurred in the third quarter of 2022.”
Credit Suisse saw customer withdrawals of more than 110 billion Swiss francs in the fourth quarter, as a string of scandals, legacy risk and compliance failures continued to plague it.
Not a good situation. I hope this contagion does not take all the banks down worldwide. It seems like that’s the intended consequence of somebody.
I see a buying opportunity.
The entire financial system is interconnected like a giant Jenga Tower.
When you remove one block, the rest become very shaky..............
CS’s stock doesn’t have much room to go down. Maybe that financial genius, Cramer, will say CS is going to fail. That means the exact opposite will occur and CS will be infused with confidence and capital.
I saw something that Putin said they have been insulated from the banking sector so much they will not be affected one iota.
Anyone run that one by The Bidet??
Only a bailout will save CS. They’ve been on shaky ground for some time.
This is the coming storm that Trump warned the nation was coming. It will not be pretty at all.
You can go back to 2007 and see where they peaked out....trending down every year or two. After the 2008 economic collapse...they just kinda lingered there. Their stock has lost 70-percent value over 12 months. Just laying there for someone to rush in and purchase for a ridiculous low price and re-make the company.
This is where you start watching iterations of 10% drops for companies or sectors in distress. The key is to find out where the risk is reduced. How far can this go? Have no idea.
Market (Dow) is down 506 at 11:41am. Let’s Go BRANDON!
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