Since the middle of the week, the lurching Credit Suisse has been going downhill steeply. The big bank has recently suffered from a significant loss of investor confidence. The share price had fallen to a record low after the bank’s largest investor ruled out providing further capital and the institute continued to struggle with cash outflows. The last few days at a glance.
Wednesday, March 15, 2023: CS stock in free fall
Die share Credit Suisse falls by over 30 percent at times new all-time low at 1.55 francs. The reason is, among other things, statements by the new major shareholder from Saudi Arabia.
The President of Saudi SNB, Ammar Al Khudairy, ruled out further financial support for CS in an interview. one will no more money inject into the bank, also for regulatory reasons that would arise if the stake were increased to 10 percent. As part of the CS capital increase in autumn 2022, the Saudi National Bank joined and holds 9.9 percent of CS shares. The Saudis have always stated that they do not want to exceed this value.
In the evening, the Federal Financial Market Supervisory Authority Finma and the Swiss National Bank SNB announced that they will provide liquidity to Credit Suisse if required. According to the SNB, the big bank meets the capital and liquidity requirements for systemically important banks. The stability of the Swiss financial system should be secured, it is said.
Thursday, March 16, 2023: SNB steps into the breach
The CS borrows up to 50 billion francs from the Swiss National Bank SNB, to ensure liquidity. At the same time, the bank announces a number of debt buybacks worth around three billion Swiss francs.
In the week had among other things the bankruptcy of the American Silicon Valley Bank Shock waves were sent through the financial markets, with the already troubled CS viewed as the weakest link in the chain.
Friday, March 17, 2023: Media brings UBS into play
At least four big banks are said to have decided to limit their dealings with Credit Suisse or its securities, including Deutsche Bank. The Reuters news agency reports, citing five people familiar with the matter.
While the CS share price is already falling again, speculation about a split of the second largest Swiss financial institution is getting louder. The “Financial Times” reported in the evening that the UBS and the CS itself in takeover talks should be located.
The Bloomberg news agency reported on Thursday that UBS and CS would become one reject forced merger.
Saturday, March 18, 2023: The Federal Council is in session and the rumor mill is churning
The business newspaper “Financial Times” reports that the fund manager Blackrock working on a takeover bid. A little later, the rumor was denied by the Bloomberg agency.
It would be a competing offer to that possible takeover through the UBS standing in the room. According to media reports, UBS is demanding in the event of a possible takeover State guarantees in the billions. The guarantees are intended to cover the costs of winding up portions of Credit Suisse, as well as potential litigation costs.
In the evening he meets Federal Council for an urgent meeting on the CS situation. Officially, neither the authorities nor the two big banks want to comment on the negotiations.
Legend:
The teetering Credit Suisse has recently suffered from a significant loss of investor confidence.
KEYSTONE/Michael Buholzer