Credit Suisse said on Thursday it would borrow nearly $54 billion from the Swiss Central Bank to bolster the group after its share price fell.
The disclosure came just hours after the Swiss National Bank said the lender’s capital and liquidity levels were adequate for a ‘systemically important bank’, although it pledged to provide liquidity if needed. .
In a statement, Credit Suisse said the central bank loan of up to 50 billion francs ($53.7 billion) would “support…core businesses and customers,” adding that it was also making offers to redemption of approximately $3 billion in debt.
“These steps demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” CEO Ulrich Koerner said in the statement.
“My team and I are committed to moving forward quickly to deliver a simpler, more focused bank built around customer needs.”
Credit Suisse, hit by a series of scandals in recent years, saw its stock price plummet on Wednesday after major shareholder Saudi National Bank refused to invest further in the group, citing regulatory constraints.
Its shares fell more than 30% to a record low before regaining ground to end the day down 24.24%, at 1.697 Swiss francs.
Credit Suisse’s market value had already taken a hit this week on contagion fears from the collapse of two US banks, as well as its annual report citing “material weaknesses” in internal controls.
Analysts warned of growing concerns over the bank’s viability and the impact on the banking sector as a whole, as shares of other lenders fell on Wednesday after rebounding the day before.
Credit Suisse is one of 30 global banks deemed too big to fail, forcing it to set aside more cash to weather a crisis.
Neil Wilson, chief market analyst at trading firm Finalto, said on Wednesday that if the bank “ran into serious existential problems, we were in a whole other world of pain.”
In February 2021, Credit Suisse shares were worth 12.78 Swiss francs, but since then the bank has suffered a barrage of problems that have eaten away at its market value.
She was hit by the implosion of the American fund Archegos, which cost her more than 5 billion dollars.
Its asset management arm was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds.
The bank recorded a net loss of 7.3 billion Swiss francs for the 2022 financial year.
This happened against the backdrop of massive withdrawals of funds by its clients, including in the wealth management sector, one of the activities on which the bank intends to refocus as part of a major restructuring plan. .