Credit Suisse shares crash

Shares of Credit Suisse, Switzerland’s second-largest bank, fell by more than 20% to a new all-time low on Wednesday after Saudi National Bank Chairman, Ammar Al Khudairy, appeared to rule out providing additional funding to the struggling lender. In an interview with, Al Khudairy stated that the regulatory and statutory obligations that kick in if the bank’s stake went above 10% were a major obstacle to any further investment. The Saudi National Bank was the biggest backer of Credit Suisse, committing $1.5bn of the $4bn in new capital that the Swiss lender raised to fund its overhaul in October.

Credit Suisse has struggled with compliance failures and missteps over the past few years, causing several top executives to lose their jobs, and denting the bank’s reputation with investors and clients. Last year, customers withdrew CHF 123bn ($133bn) from the bank, leading to an annual net loss of CHF 7.3bn ($7.9bn), its largest since the 2008 global financial crisis. In October, Credit Suisse embarked on a restructuring plan that involves reducing 9,000 full-time jobs, spinning off its investment bank, and concentrating on wealth management.

While Al Khudairy stated that he was content with the restructuring plan and believed that the bank would not require extra funds, the crash of Credit Suisse shares resulted in other European banking shares falling between 8% and 10%. On Tuesday, the bank reported a “material weakness” in its financial reporting, as well as scrapping bonuses for top executives. According to the bank’s annual report, the internal control over financial reporting was not effective, and a remediation plan is under development to reinforce its controls. Credit Suisse CEO Ulrich Körner has confirmed that outflows from the bank have moderated significantly, even after customers withdrew CHF 111bn ($122bn) in the three months ending December 2022.

As of press time, Credit Suisse declined to comment on the matter. The Swiss National Bank and the European Central Bank (ECB) have also declined to comment. The ECB indirectly regulates Credit Suisse due to its presence in eurozone countries such as Italy, Germany, and Spain. S&P Global Market Intelligence has indicated that the cost of purchasing insurance to hedge against the risk of a Credit Suisse default has reached an all-time high.

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