Credit Suisse shares slide 20% for second all-time low in second consecutive day
Rachel Schilke
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Shares of Credit Suisse hit a second all-time low on Wednesday morning, dropping over 20% following the collapse of Silicon Valley Bank last week.
Saudi National Bank, the Swiss bank’s largest investor, said it would not provide Credit Suisse with any further financial assistance.
SVB COLLAPSE: SHARES OF CREDIT SUISSE HIT NEW ALL-TIME LOW IN MORNING TRADING
“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters on Wednesday.
Credit Suisse is one of several financial institutions showing financial instability following the collapse of Silicon Valley Bank, which saw a historic run on deposits. Clients withdrew $42 billion in a single day and the bank had a $958 million negative cash balance by last Thursday, with stocks falling 60%.
The uncertainty in the markets was set off by both Silicon Valley Bank’s failure on Friday and the subsequent collapse of Signature Bank on Sunday. Like Credit Suisse, other Italian banks were subjected to trading stoppage after sharp declines on Wednesday, such as UniCredit, Monte Dei Paschi, and Finecobank.
Credit Suisse announced on Tuesday that “material weakness” was discovered in its financial reporting for 2021 and 2022, leading to a fall in shares. Tuesday marked the bank’s first all-time low in credit sharing, falling 5%.
In late 2022, the bank disclosed that it saw “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.”
Customer withdrawals amounted to over 110 billion Swiss francs in the fourth quarter, adding to Credit Suisse experiencing compliance failures and a string of scandals, per CNBC.
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Credit Suisse Chairman Axel Lehmann said in a panel session Wednesday morning that an emphasis on de-risking the bank’s balance is underway. He said asking for government assistance in the future is “not the topic.”
“We are regulated, we have strong capital ratios, very strong balance sheet. We are all hands on deck,” Lehmann said. “So that’s not the topic whatsoever.”