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15 Mar, 2023 14:10

Credit Suisse shares plunge

The lender’s biggest backer, Saudi National Bank, has ruled out further assistance
Credit Suisse shares plunge

Shares in embattled bank Credit Suisse have hit another all-time low for a second day in row, losing nearly a quarter of their value, after its largest shareholder refused further financial assistance, Reuters reported on Wednesday.

Saudi National Bank (SNB), which acquired a 10% stake in the Swiss banking giant in 2023, said it could not provide any further financial aid, citing regulatory and statutory issues.

“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy said, as cited by the agency.

According to the executive, SNB is happy with Credit Suisse’s transformation plan and suggested the bank was unlikely to need extra money.

The largest Saudi financial institution and majority-owned by the kingdom's government, SNB took a 9.9% stake in the Swiss banking major as part of Credit Suisse’s capital-raising, and committed to investing up to 1.5 billion Swiss francs ($1.5 billion).

The Swiss bank’s $4.2 billion capital-raise was aimed at funding a massive strategic overhaul designed to improve the performance of its investment banking sector and to address a wide range of risks and compliance failures.

On Tuesday Credit Suisse, Switzerland’s second-biggest bank, published its annual report for 2022 saying it had identified “material weaknesses” in controls over financial reporting and not-yet-stemmed customer outflows.

The lender is currently trying to recover from a series of scandals and losses that have shaken the confidence of investors and clients. Customer outflows in the fourth quarter totaled over 110 billion Swiss francs ($120 billion).

Executives at major banks in Switzerland have warned that the country’s decision to support Ukraine-related sanctions against Russia is having a negative impact on their business, Financial Times reported on Thursday.

The unnamed banking officials told the media outlet that rich clientele from China are seriously worried about depositing their money in Swiss banks, after Bern ditched its policy of neutrality by freezing billions in Russian assets as part of sanctions.

For more stories on economy & finance visit RT's business section

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