Urgent Credit Suisse Bank shares rose 40%, boosted by news that the bank took out a $54 billion loan from the Swiss Central Bank to restore confidence. #East_Economy
Bloomberg previously reported that the Swiss government, central bank and financial regulator Finma are discussing ways to stabilize Credit Suisse, after a stormy day sparked by comments from the bank’s biggest investor (the National Bank of Saudi Arabia).
“These steps demonstrate decisive actions to strengthen Credit Suisse’s resilience as we continue our strategic transformation,” CEO Ulrich Korner said in a statement. He added: “My team and I are determined to move quickly to transform ourselves into a simpler, more customer-focused bank.”
Credit Suisse has announced its second debt buyback in the last six months as it seeks to restore investor confidence. The bank offered to buy back about $3 billion of its debt in October last year, announcing at the time that it wanted to “take advantage of market conditions to buy back debt at attractive rates.”
The latest offering includes 10 large debt securities of up to $2.5 billion, as well as 4 large euro-denominated debt securities of up to $500 million.
Switzerland’s second-largest bank, whose roots date back to 1856, has been rocked in recent years by a series of troubles, scandals, leadership reforms and legal troubles. The bank’s loss of 7.3 billion francs last year wiped out the gains of the previous decade, and the bank’s second strategic transformation plan, over its many-year career, has so far failed to attract investors or stop the migration of its customers to other financial institutions. institutions
The executive president, Ulrich Korner, asked for patience on Tuesday, stressing that the financial position of “Credit Suisse” is solid, referring to the bank’s liquidity coverage ratio, which is capable of facing a period of more than one month of departures in case of a period of stress.
Board Chairman Axel Lehmann had declared, at a conference (in Riyadh) on Wednesday, that government assistance is “not up for discussion”, and that the Swiss bank’s efforts to return to profitability cannot be compared to the severe liquidity crisis affecting small banks in the United States.
Bloomberg previously reported that the government, central bank and FINMA are in contact to discuss ways to stabilize Credit Suisse. And people familiar with the matter revealed that the ideas being put forward – in addition to government support – included separating the bank’s Swiss unit and linking it organizationally in the long term with the biggest Swiss competitor, “UBS Group”, noting that it is not clear that none of these steps, if approved, will actually be implemented