Credit Suisse announced today that it will receive a loan of up to 50 billion Swiss francs (50.7 billion euros) from the central bank of Switzerland to “strengthen” the institution’s accounts.
At the same time, the second largest Swiss bank announced a series of debt repurchase operations worth around 3 billion Swiss francs (3.04 billion euros).
“These measures are a decisive move to strengthen Credit Suisse as we continue our strategic transformation to create value for our customers and other stakeholders,” said the bank’s chief executive, Ulrich Koerner, in a statement.
The short-term loan came hours after, in a joint statement, the Swiss National Bank (BNS) and the financial regulator of Switzerland (Finma) assured that they would provide liquidity to Credit Suisse, if necessary, in the face of the worst moment in 167 years of bank history.
Credit Suisse experienced its darkest day on the stock exchange on Wednesday, losing a quarter of its value, with its shares falling to a historically low level, below 2 Swiss francs (2.03 euros).
The bank has lost around 30% of its value on the Zurich stock exchange since the middle of last week, at a time when its own internal crisis, which dates back to 2019, was intertwined with the more generalized one that global banking is going through, triggered by the collapse of the Silicon Valley Bank in the USA.
For the SNB and Finma, “the current turmoil in the US banking market does not suggest that there is a risk of direct contagion to Swiss establishments”.
The concern goes beyond the borders of the Alpine country and the US Treasury Department said that it is “monitoring the situation and in contact with its international counterparts”.
In France, Prime Minister Elisabeth Borne publicly appealed to the Swiss authorities to resolve the bank’s problems and asked the finance minister to speak with his counterpart in Bern.
The bank has been recording millionaire losses for two years: in 2021 they amounted to 1.57 billion Swiss francs (1.6 billion euros) and in 2022 they almost quintupled to 7.29 billion francs (7.4 billion billion euros).
Credit Suisse also suffered liquidity drawdowns worth 123.2 billion Swiss francs (126 billion euros) last year.
The main strategy launched by the bank to try to put an end to its crisis is the restructuring plan launched in October, which included a capital increase of four billion francs (4.09 billion euros).
The capital increase saw the Saudi National Bank become the company’s largest shareholder, after investing 1.5 billion Swiss francs (1.53 billion euros).
The president of the Saudi bank, Ammar al Khudairy, said on Wednesday in an interview that the institution would not increase this investment, which contributed to Credit Suisse falling even more on the stock exchange.
