CNN Indonesia
Wednesday, 15 March 2023 21:16 WIB
Credit Suisse shares fell more than 20 percent after its biggest backer appeared to refuse to provide the Swiss bank with further funding. (AFP/FABRICE COFFINI).
Jakarta, CNN Indonesia —
Shares Swiss credit fell more than 20 percent on Wednesday to its lowest level, after its biggest backers appeared to refuse to provide the Swiss bank with further funding.
Report AFP even said the bank’s shares fell 30 percent this afternoon.
Collect CNNWednesday (15/3), in an interview with Bloomberg, the chairman of the Saudi National Bank said that the bank would not increase its stake in Credit Suisse.
“The answer is not at all, for many reasons. I’ll mention the simplest reason, which is regulations and rules. We currently own a 9.8 percent stake in the bank – if we go over 10 percent, all sorts of new rules will apply, either it is from our regulator, European regulator, or Swiss regulator,” Ammar Al Khudairy told Bloomberg.
“We don’t want to enter into a new regulatory regime,” he added.
Credit Suisse was once a big player on Wall Street. The bank has also been hit by a series of errors and compliance failures over the past few years that have damaged its reputation with clients and investors and cost several top executives their jobs.
The bank’s shares fell nearly 22 percent in Zurich on Wednesday, and the cost of buying insurance against Credit Suisse hit a new record high, according to S&P Global Market Intelligence.
Credit Suisse declined to comment. The Swiss Central Bank also declined to comment and the European Central Bank said it could not comment on specific banks.
This is because the ECB has an indirect role in regulating Credit Suisse due to its presence in euro zone countries such as Germany, Italy and Spain.
The crisis spread to other European banking stocks, with French and German banks such as BNP Paribas, Societe Generale, Commerzbank and Deutsche Bank dropping between 8 percent and 10 percent.
Earlier, customers withdrew 123 billion Swiss francs (US$133 billion) from Credit Suisse in the past year, most of them in the fourth quarter, and the bank reported an annual net loss of nearly 7.3 billion Swiss francs (US$7.9 billion), the most since the global financial crisis in 2008.
In October 2022, the lender embarked on a “radical” restructuring plan that involved cutting 9,000 full-time jobs, separating its investment bank and focusing on wealth management.
The Saudi National Bank committed US$1.5 billion of the US$4 billion in new capital Credit Suisse raised to fund the revamp. Al Khudairy said he was happy with the restructuring.
“We are satisfied with the plan, the transformation plan that they put forward. It is a very strong bank,” Al Khudairy said in an interview with Reuters.
“I don’t think they will need extra money; if you look at their ratios, everything is fine. And they operate under a strong regulatory regime in Switzerland and in other countries,” said Al Khudairy.
(Ju)
