“LITTLE BIT OF PANIC”
Credit Suisse’s stock slide Wednesday came after Ammar al-Khudairy, chairman of its biggest shareholder, Saudi National Bank, said it would “absolutely not” raise its stake in the group due to regulatory constraints.
Khudairy said Thursday that the market panic was “unwarranted”.
“If you look at how the entire banking sector has dropped, unfortunately, a lot of people were just looking for excuses,” he told CNBC television.
“It’s panic, a little bit of panic. I believe completely unwarranted, whether it be for Credit Suisse or for the entire market.”
The SNB loan to Credit Suisse came after the central bank and FINMA issued a joint statement.
“Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks,” they said, referring to the demands placed on the 30 banks worldwide deemed to be of global importance to the banking system.
These banks, dubbed too big to fail, are required to set aside additional cash to withstand shocks in the event of market turbulence.
Andreas Venditti, an analyst at Swiss investment managers Vontobel, said the Swiss authorities’ intervention was a “strong and important signal”.
“However, it will take time to fully regain trust in the franchise,” he added.
Credit Suisse is engaged in a major restructuring programme launched last October following a series of scandals that tarnished its reputation.
In February 2021, Credit Suisse shares were worth 12.78 Swiss francs, but since then, a barrage of problems has eaten away at its market value and undermined confidence in the rejig.
Credit Suisse plans to separate its investment banking arm from the rest of its activities, and refocus on wealth management, asset management and on its Swiss domestic banking.
But the bank has continued to suffer setbacks since then as investors grew impatient to see it put its house in order.