(News Bulletin 247) – Credit Suisse shares soar Thursday morning on the Zurich Stock Exchange and erase all of their losses from the previous day, the announcement of support from the Swiss National Bank (SNB) having been enough to convince investors to return to value.
Around 9:40 a.m., the title of the Swiss private bank jumped more than 28%, an increase which more than erased the heavy losses suffered at the end of Wednesday’s session (-24%).
In a press release published in the morning, Credit Suisse announced the launch of a number of measures described as “decisive” in order to “preventively” strengthen its cash position.
The establishment explains that it has planned to borrow up to 50 billion Swiss francs (about 50 billion euros) from the SNB in the form of a credit facility.
“This additional liquidity will support Credit Suisse’s core business and clientele as the group takes the necessary steps to create a simpler, more client-focused bank,” he said.
Credit Suisse also plans to buy back part of its senior debt for an amount that could reach three billion Swiss francs.
Still for appeasement purposes, the bank also recalls that at the end of 2022 it posted a ‘CET1’ solvency ratio of 14.1%, while its liquidity ratio amounted to 150% as of Tuesday.
The Swiss Financial Market Supervisory Authority (FINMA) also estimated last night that Credit Suisse met the specific capital and liquidity requirements applicable to “systemically” important banks.
‘The strengthening of its cash position and the support provided by the Swiss National Bank with the support of FINMA are positive elements’, RBC analysts react this morning.
‘Regaining market confidence promises to be a key element of stock market recovery,’ they add.
“The measures that have been taken should reassure that a contagion effect on the rest of the sector could be avoided, but the situation remains uncertain,” concludes the Canadian consultancy.
The European banking sector index, the STOXX Europe 600 Banks, only posted a limited rebound of 2.5% on Thursday morning, illustrating the caution still in order among investors.
Copyright (c) 2023 News Bulletin 247. All rights reserved.
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
