The global economy is barely tackling the massive fall of the Silicon Valley Bank (SVB). Switzerland’s largest investment bank Credit Suisse Group AG’s (CS) shares reportedly fell 24% on Wednesday, as its largest shareholder, Saudi National Bank, said no monetary support is possible anymore for Credit Suisse.
Sharing the technical insights, Holger Zschaepitz, Journalist, WELT, tweeted:
Credit Suisse plunges to fresh All-Time low as Saudi National Bank rules out assistance. Now down 96.7% below ATH. pic.twitter.com/33KDigAlDc
— Holger Zschaepitz (@Schuldensuehner) March 15, 2023
Ammar Al Khudairy, Chairman, Saudi National Bank (SNB), clarified the situation by saying it is not possible to raise its 10% stake due to regulatory restrictions. SNB Chairman Ammar Al Khudairy reportedly said,
We cannot because we would go above 10 per cent. It’s a regulatory issue.
Khudairy also added that SNB appreciated the transformation plan tabled by Credit Suisse, and believes CS will not require any monetary help.
Ulrich Koerner, CEO, Credit Suisse, said Our capital, our liquidity basis is very, very strong. We fulfill and overshoot basically all regulatory requirements.
With its sovereign wealth fund owning 37% (9.9% stake in CS for CHF 1.4 billion) of Credit Suisse, the Saudi National Bank claimed the largest shareholding of CS in 2022. SNB’s CS stake has reportedly lost over 500 million francs in a couple of months.
Antoine Bouvet, senior rates strategist, ING, said, The Credit Suisse share price is falling and government bonds are rallying on the back of that. Still very much driven by the perceived health of the banking sector, but this time in Europe.
Credit Suisse’s falling share price has reportedly sent the pan-European Stoxx 600 down 2.4%. The Credit Suisse plight sent chills down the spine of other major banks’ stocks, as well. Reportedly, BNP Paribas fell 11.1%, Societe Generale fell 12.9%, Commerzbank fell 10.1%, and Deutsche Bank fell 8.6%.
