Credit Suisse Shares Soar More Than 30% After Announcement Of Swiss National Bank Loan

March 16, 2023
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As the market opened Thursday, Credit Suisse shares surged more than 30 percent after the bank announced that it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.

The Credit Suisse rally calmed a little in early trading, but shares were still up 21.8 percent at 10 a.m. London time (6 a.m. ET).

The battered financial institution announced late Wednesday that it would follow through on an option to borrow from the Swiss central bank utilizing a covered loan facility and a short-term liquidity facility.

On Wednesday, the Swiss National Bank and the Swiss Financial Market Supervisory Authority said that Credit Suisse "meets the capital and liquidity requirements imposed on systemically important banks."

The bank also offered to buy back approximately 3 billion Swiss francs' worth of debt, relating to 4 euro-denominated senior debt securities and 10 U.S. dollar-denominated senior debt securities.

In a statement released Wednesday, Credit Suisse CEO, Ulrich Koerner, said, "These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders."

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"We thank the [Swiss National Bank] and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs," Koerner concluded.

Credit Suisse stock, and that of many of other European banks, began to slide Monday, as fears mounted after the collapse of Silicon Valley Bank over the weekend.

On Tuesday, the lender's losses increased after the release of its delayed annual report, which announced that "material weakness" had been identified in its 2021 and 2022 financial reporting, although the financial institution insisted that those weaknesses did not affect the accuracy of its financial statements.

Wednesday marked the second consecutive day that Credit Suisse shares plummeted to a new all-time low after top investor, Saudi National Bank, announced that it would not invest any more cash due to regulatory restrictions.

The Saudi National Bank had taken a 9.9 percent stake in Credit Suisse as part of the bank's $4.2 billion capital raise, which was to fund a large strategic overall that was meant to improve the performance of investment banking and address a variety of risk and compliance failures.

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Jen Snow

Jen Snow is a former paralegal turned freelance writer who has a passion for foreign affairs. When not writing, she can be found curled up with her dog and a good book or outside playing in the Florida sun.
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