The largest shareholder of Credit Suisse Group AG has ruled out giving the bank any financial support. It gave regulatory concerns as justification for reversing course.
Details about The largest shareholder in Credit Suisse As its stock drops 20%, Saudi National Bank ruled out additional financial support
Chairman Ammar Al Khudairy responded, “absolutely not,” when asked by Bloomberg TV if the Saudi National Bank was willing to provide Credit Suisse with extra liquidity. “The answer is obviously not, for numerous reasons outside the simplest reason which is regulatory and statutory,” stated the Chairman, as mentioned in a report in Bloomberg.
After purchasing 9.9% of Credit Suisse’s shares last year, Saudi National Bank, whose 37 percent is held by the kingdom’s sovereign wealth fund, became the bank’s largest shareholder.
After being severely damaged earlier in the week as a result of market fallout from Silicon Valley Bank’s failure, trading in the shares of the Swiss bank was suspended late in the morning as they dropped by a fifth to new record lows. The second-largest bank in Switzerland is attempting to bounce back from a spate of scandals that have damaged its reputation with customers and investors. Client withdrawals increased to well than 110 billion Swiss francs ($120 billion) in the fourth quarter.
Al Khudairy claimed that SNB was pleased with Credit Suisse’s turnaround strategy and did not anticipate the need for more funding, but he also characterised his bank’s investment as opportunistic and not time-sensitive. He continued by saying that the Saudi bank would leave after the shares had been acquired at fair value.
“We approve of the plan, or transformation plan, that has been presented. It is an extremely robust bank, “Al Khudairy made this statement in Riyadh, outside of a conference.
“They won’t require further funding, in my opinion; their ratios show that they’re in good shape. Also, they are subject to stringent regulation in Switzerland and other nations.”
By 1046 GMT, shares of Credit Suisse were down 20%, selling for 1.7840 Swiss francs.
Axel Lehmann, the bank’s chairman, stated that the institution is working to restore client confidence following a string of slip-ups.
When Credit Suisse reported that client outflows have stabilised but not reversed, its bonds fell, with some values hitting record lows. The price of many of the bank’s dollar-denominated extra tier 1 bonds dropped to record lows, falling more than four cents. Customer “outflows stabilised at substantially lower levels but had not yet reversed as of the date of this report,” according to Credit Suisse’s 2022 annual report.