The Credit Suisse Group AG (NYSE: CS) stock price fell 28.4% after its largest shareholder, the Saudi National Bank, said it would not give the troubled bank any further financial assistance. The Chairman of the Saudi bank said that it does not wish to own 10% of the bank.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
During an interview with Blomberg, Saudi National Bank Chair Ammar Al Khudairy said that the bank already owned 9.8% of Credit Suisse and wanted to avoid entering a new regulatory regime by crossing the 10% threshold. The Saudi chair said that crossing the threshold would attract the attention of the Saudi regulators, the Swiss regulator and European regulators.
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The Saudi National Bank’s decision spooked investors despite the positive nature of the decision. Al Khudairy said that he was satisfied by Credit Suisse’s turnaround after providing $1.5 billion of the $4 billion raised by the Swiss bank to fund its overhaul.
In an interview with Reuters, Al Khudairy said: “We are happy with the plan, the transformation plan they have put forward. It is a very strong bank. I don’t think they will need extra money; if you look at their ratios, they’re fine. And they operate under a strong regulatory regime in Switzerland and in other countries.”
However, investors are worried that Credit Suisse’s past will come haunting it once more after its customers withdrew 111 billion francs ($122 billion) in the three months to December. The bank’s CEO, Ulrich Körner, said in a Bloomberg interview on Tuesday that it had witnessed ‘material good inflows’ of money after the collapse of Silicon Valley Bank and Signature Bank.
Credit Suisse and its regulator, the Swiss National Bank, did not comment on the latest developments.
Still, Credit Suisse admitted to material weaknesses in its financial reporting yesterday following an audit of its financial statements for 2021 and 2022. Based on the audit report, the bank cancelled bonuses for its top executives.
While the bank took steps to allay investor fears about its financial position, the scrapping of executive bonuses was a significant red flag that cannot be ignored.
*This is not investment advice.
Credit Suisse stock price.
The Credit Suisse (CS) stock price plunged 28.4% to trade at $1.80, from Tuesday’s closing price of $2.51.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.