Credit Suisse borrows $54 billion to bolster liquidity after stocks hit record high


Credit Suisse said on Thursday it was exercising an option to borrow $53.75 billion (50 billion Swiss francs) from the Swiss National Bank, as it seeks to allay concerns about its liquidity one day after shares of the crisis bank plunged to a record low.


In a Press releaseCredit Suisse said it was taking this step to “preemptively strengthen its liquidity” and that the funds were borrowed from the Swiss central bank under its covered lending facility and a short-term liquidity facility .

The loan comes a day after the Swiss National Bank said he was ready to provide liquidity to Credit Suisse “if necessary”, while adding that the bank met all “capital and liquidity requirements imposed on systemically important banks”.

In order to reduce interest charges, Credit Suisse also announced that it would launch a debt securities repurchase offer worth approximately $3 billion, including 10 US dollar bonds worth $2.5 billion and four euro bonds worth $530 million (€500 million).

The bank’s CEO, Ulrich Koerner, said the bank was taking “decisive steps” as it pursued its strategic transformation plan to “deliver a simpler, more focused bank built around customer needs”.

Key Context

The Zurich-based lender, which has battled a host of crises, saw its stock tumble to a record low on Wednesday, ending the day more than 24% in the red. Global banking stocks have been hit hard in recent days on fears that the collapse of Silicon Valley Bank could escalate into a larger crisis. However, most of Credit Suisse’s problems predate the collapse of SVB, including liquidity fears triggered by a surge in customer withdrawals last year, which the bank said has now “stabilized at much lower levels” but has “not yet reversed”. As concerns about Credit Suisse’s financial health began to mount, its largest shareholder, Saudi National Bank, excluded inject more funds into the bank, notably for “regulatory and statutory” reasons.

Peg News

Credit Suisse has been plagued by a litany of scandals over the past few years. Earlier this week, the bank disclosed it had discovered “material weaknesses” in its financial reporting processes that could have resulted in “inaccuracies” in the financial results. The lender said its management was working on a plan to remedy the problem, while adding that its annual report “presents fairly” its consolidated financial position for the past two years. In 2021, the bank reported a loss of $1.72 billion due to the bankruptcy of fund partner Greensill Capital, and suffered another $5.5 billion hit following the collapse of hedge fund Archegos. Capital. Last March, the lender handling information about assets linked to Russian oligarchs has been reviewed by the US House Oversight Committee. In October last year, the bank saw an increase in customer withdrawals after social media rumors raised concerns about the financial health of Credit Suisse. In its earnings report last month, the company announced losses of $8 billion (7.3 billion francs) for 2022, its biggest annual loss since the 2008 financial crisis.


Several major European banks saw share values ​​plummet on Thursday as fears about the financial health of banking institutions surged across the Atlantic. In Paris, BNP Paribas shares fell more than 10%, while Societe Generale ended the day down more than 12%. Shares of Frankfurt-listed Deutsche Bank fell 9.25%, while Santander shares fell nearly 7% in Madrid.

Further reading

Credit Suisse stock plunges to record high as bank concerns grow (Forbes)

Another Credit Suisse crisis: Bank finds ‘significant weaknesses’ in financial reporting (Forbes)

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