Credit Suisse shares surge 23% after the Swiss National Bank loan announcement
- Credit Suisse shares surged more than 30% at the market open after the bank said it will borrow up to $54 billion from the Swiss National Bank.
- It comes after shares in Credit Suisse plunged to a new low on Wednesday when top investor Saudi National Bank said it would not pump in more money due to regulatory restrictions.
- The Swiss National Bank and the Swiss Financial Supervisory Authority said in a statement that Credit Suisse “meets the capital and liquidity requirements imposed on systemically important banks”[ads1];.
A branch of the Swiss banking giant Credit Suisse behind a window under the rain, in Basel. (Photo by FABRICE COFFRINI / AFP) (Photo by FABRICE COFFRINI / AFP via Getty Images)
Fabrice Coffrini | Afp | Getty Images
Credit Suisse shares surged more than 30% at Thursday’s market open after the bank said it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.
The stock’s rally cooled a bit in early trade, but shares were still up 23% at 08:48 London time.
The embattled lender announced late Wednesday that it would exercise its option to borrow from the Swiss central bank under a secured credit facility and a short-term liquidity facility.
The Swiss National Bank and the Swiss Financial Supervisory Authority said in a statement on Wednesday that Credit Suisse “meets the capital and liquidity requirements imposed on systemically important banks”.
The bank also offered to buy back debt for around 3 billion Swiss francs, linked to 10 US dollar-denominated senior debt securities and four euro-denominated senior debt securities.
“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” Credit Suisse CEO Ulrich Koerner said in the statement Wednesday.
“We thank [Swiss National Bank] and FINMA as we carry out our strategic transformation. My team and I are determined to move swiftly forward to deliver a simpler and more focused bank built around our customers’ needs.”
Credit Suisse shares began falling at the start of the week, along with many other European banks, on fears of contagion in light of the collapse of Silicon Valley Bank.
The Swiss bank’s losses widened on Tuesday after it announced in its delayed annual report that “material weakness” had been found in its financial reporting in 2021 and 2022, although it said this did not affect the accuracy of the bank’s accounts.
Credit Suisse’s shares plunged to a new record low for a second straight day on Wednesday after Saudi National Bank – a top investor – said it would not pump in more money due to regulatory restrictions.
The National Bank of Saudi Arabia took a 9.9% stake in Credit Suisse as part of the lender’s $4.2 billion capital raising to fund a massive strategic overhaul, aimed at improving investment banking performance and addressing a range of risk and compliance failures.
