A branch of Swiss banking giant Credit Suisse behind a window in the rain, in Basel. (Photo by FABRICE COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images)
Fabrice Cofrini | Afp | Getty Images
Credit Switzerland Shares rose more than 30% at market open Thursday after the bank said it would borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.
The stock’s rally cooled somewhat in early trading, but shares were still up 21.8% at 10:02am London time.
The embattled lender announced late Wednesday that it would exercise its option to borrow from the Swiss central bank under a secured loan facility and a short-term liquidity facility.
The Swiss National Bank and the Swiss financial market regulator said in a statement Wednesday that Credit Suisse “complies with the capital and liquidity requirements imposed on systemically important banks.”
The bank also offered to repurchase approximately CHF 3 billion of debt, covering 10 US dollar-denominated senior debt securities and four euro-denominated senior debt securities.
“These actions demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our customers and other stakeholders,” Credit Suisse CEO Ulrich Koerner said in a press release Wednesday.
“We thank the (Swiss National Bank) and FINMA in executing our strategic transformation. My team and I are determined to move forward quickly to create a simpler and more focused bank built around customer needs .”
Shares of Credit Suisse began falling early in the week, as did many other European banks, on fears of contagion in the face of the collapse of Silicon Valley Bank.
The Swiss bank’s losses widened on Tuesday after it announced in its deferred annual report that it had found “material weakness” in its financial reporting in 2021 and 2022, though it said it had no impact on the accuracy of the bank’s financial statements. .
Shares of Credit Suisse fell to a new low for a second straight day on Wednesday after the Saudi National Bank – a top investor – said it would stop pumping in money due to regulatory restrictions.
The Saudi National Bank took a 9.9% stake in Credit Suisse as part of the 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 errors.
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