The Saudi National Bank, Credit Suisse’s top shareholder, said it would not inject more money into the Swiss bank, raising concerns about the bank again.
Fabrice Coffrini / AFP via Getty Images
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Problems at Switzerland’s second-biggest lender are roiling bank shares around the world.
on Wednesday,
credit Suisse
The top shareholder said in a Bloomberg interview that he would not invest any more money in the Swiss bank. Ammar Al Khudairi, president of the Saudi National Bank, told media outlets that taking a stake of more than 10% in Credit Suisse would create regulatory complications.
That pushed Credit Suisse shares to a new low on Wednesday. The stock (ticker: CS) fell 26% in Zurich and its American Depository Receipts were down 28% in premarket trading.
Following the collapse of Silicon Valley Bank last week, the banking sector is on high alert. Trading in shares of some European banks like Credit Suisse and France
Societe Generale
(Gle. France) and Italy
Unicredit
(UCG. Italy) was temporarily stopped. american lenders
City Group
(C),
JPMorgan Chase
(JPM), and
Wells Fargo
(WFC) also fell in the early hours of Wednesday. Regional banks Western Alliance Bancorp (WAL), First Republic Bank (FRC) and Comerica (CMA) also pulled back.
S&P 500
was off 1.4% and
Dow Jones Industrial Average
was down more than 500 points, or 1.6%.
“The banking route has taken another ominous turn,” said Susannah Streeter, head of money markets at Hargreaves Lansdowne. “The concern is that if there is a rapid outflow of deposits, banks may not have enough buffers sitting on large unrealized losses in their bond portfolios.”
Credit Suisse has struggled recently. The stock fell on Tuesday after the release of a delayed annual report describing weaknesses in the firm’s financial controls. The report was delayed after the Securities and Exchange Commission raised questions about its cash flow statements in 2019 and 2020.
Last week, asset manager Harris Associates, Credit Suisse’s largest shareholder, completely exited its position in the bank, according to a report in the Financial Times.
Credit Suisse declined to comment.
This is the latest in a series of issues at the bank. The 170-year-old Swiss bank was hit hard by the collapse of Archigos Capital and Greensoil Capital in 2021. A series of scandals, executive changes and client withdrawals.
In November, Credit Suisse announced plans to spin out its investment bank under its revived First Boston brand. It also dropped 9,000 jobs.
Credit Suisse has now been focusing on revitalizing its wealth management business in recent years. That unit experienced outflows of approximately $100 billion in the fourth quarter. In addition to the Saudi National Bank, Credit Suisse’s largest shareholders include Qatar Holding, Olayan Group and
black Rock
,
Write to Brian Swint at [email protected] and Adam Clark at [email protected]