Credit Suisse shares slide — RT Business News
Shares of Credit Suisse resumed their decline on Friday, erasing gains from the previous session, as investor concerns continue to mount despite news of a $54 billion lifeline.
The share price of Switzerland’s second-largest bank had fallen more than 10% as of 13:10 GMT, after two days of sharp swings, which saw its shares jump 20% on Thursday after falling nearly 25% on Wednesday.
Wednesday’s drop came after the bank’s largest investor, the Saudi National Bank (SNB), said it would not be able to provide further financial assistance due to regulatory and statutory issues. The market turmoil was sparked by last week’s collapse of US tech lenders.
On Thursday, Credit Suisse said it would borrow up to 50 billion Swiss francs ($53.8 billion) from the country’s central bank, the Swiss National Bank, to reassure investors that it has enough money to stay afloat. In addition to the loan, Credit Suisse said it bought back billions of dollars of its own debt to manage liabilities and interest payment fees. The offering is for $2.5 billion in US dollar bonds and 500 million euros ($529 million) in euro bonds.
“Whether depositors feel confident enough to stem outflows over the next few days is a key question, in our view,” Frederique Carrier, head of investment strategy at RBC Wealth Management, told Reuters.
“While markets are relieved that the Swiss central bank has stepped in, sentiment is likely to remain very fragile, especially as investors are likely to worry about the potential economic impact of aggressive monetary policy tightening in the future. European Central Bank (ECB)”, she added.
Zurich-based Credit Suisse has struggled lately to recover from a series of scandals and losses that have shaken investor and client confidence. Customer outflows in the fourth quarter totaled more than 110 billion Swiss francs.
The heads of major Swiss banks have warned that the country’s decision to back Ukraine-related sanctions against Russia is having a negative impact on their business, the Financial Times reported last week.
Anonymous banking officials told the outlet that China’s wealthy clientele are seriously concerned about depositing their money in Swiss banks, after Bern abandoned its policy of neutrality by freezing billions in Russian assets as part of the sanctions.
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