Credit Suisse sheds another 5% as traders digest emergency liquidity

Credit Suisse sheds another 5% as traders digest emergency liquidity

An office building of Credit Suisse Group AG at night in Bern, Switzerland, on Wednesday, March 15, 2023.

Stefan Wermuth | Bloomberg | Getty Images

Swiss credit Shares fell 5% in early trade on Friday after surging in the previous session when the embattled lender said it would borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank .

Shares pared some losses to trade down 3.4% as of 10am London time.

This week’s intervention by Swiss authorities, who also reiterated that Credit Suisse meets capital and liquidity requirements imposed on “systemically important banks,” caused shares to soar more than 18% on Thursday after rising on Wednesday closed at an all-time low.

Credit Suisse also offered to repurchase approximately CHF 3 billion of debt relating to 10 US dollar-denominated senior debt and four euro-denominated senior debt.

The plunge to Wednesday’s lows came after top investor, the National Bank of Saudi Arabia, announced it would no longer provide cash to the bank due to regulatory requirements, fueling a downward spiral in Credit Suisse’s share price associated with the Delay in annual results from financial reporting began concerns.

The bank is undergoing a massive strategic overhaul aimed at restoring stability and profitability after a litany of losses and scandals. The reorganization includes the spin-off of the investment bank into US-based CS First Boston, a sharp reduction in exposure to risk-weighted assets, and a $4.2 billion capital raise funded in part by Saudi National’s acquired 9.9 -percentage stake is financed bank.

However, capital markets and stakeholders have yet to be convinced. Credit Suisse saw huge outflows in assets under management, while credit default swaps, which insure bondholders against a company’s default, surged to new record highs this week.

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2023-03-17 10:08:14