A branch of Swiss banking giant Credit Suisse behind a window in the rain in Basel. (Photo by FABRICE COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images)
Fabrice Coffrini |: Afp |: Getty Images:
Credit Suisse Shares rose more than 30% in the open on Thursday after the bank said it would borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.
The stock’s rally weakened slightly in early trading, but shares were still up 21.8% at 10:02 a.m. London time.
The embattled lender said late on Wednesday it would exercise its option to borrow from the Swiss central bank under covered credit and short-term liquidity facilities.
The Swiss National Bank and the Swiss Financial Market Supervisory Authority said in a statement Wednesday that Credit Suisse “meets the capital and liquidity requirements imposed on systemically important banks.”
The bank has also offered to buy back about 3 billion Swiss francs of debt in terms of $10 senior debt securities and four senior euro-denominated debt securities.
“These measures represent decisive actions to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” Credit Suisse CEO Ulrich Koerner said in a release Wednesday.
“We are grateful [Swiss National Bank] and FINMA as we implement our strategic transformation. My team and I are determined to move forward quickly to provide a simpler and more focused bank based on customer needs.”
Shares in Credit Suisse began sliding earlier in the week, along with many other European banks, on fears of contagion in light of the Silicon Valley bank’s collapse.
The Swiss bank’s losses deepened on Tuesday after it said in its delayed annual report that it had found a “significant weakness” in its financial statements for 2021 and 2022, although it did not affect the accuracy of the bank’s financial statements.
Shares in Credit Suisse fell to an all-time low for a second day in a row on Wednesday after Saudi Arabia’s National Bank, a major investor, said it would not raise any more cash due to regulatory restrictions.
National Bank of Saudi Arabia took a 9.9% stake in Credit Suisse as part of the lender’s $4.2 billion capital increase to fund a massive strategic overhaul aimed at improving investment banking and addressing a range of risks and compliance failures.