Trading halted in Credit Suisse shares as they fell 21% on Wednesday, exacerbating a losing streak for nearly a week and reaching a new all-time low. It comes as the Swiss bank struggles to overcome a series of controversies and yesterday acknowledged “fundamental weaknesses” in its financial reports.
Highlights
- The stock’s decline reached a new all-time low for the bank.
- The setback comes a day after it discovered “material weaknesses” in its financial reporting processes that could lead to “mistakes” in its financial reports, and news of clients withdrawing billions from the bank.
- Chairman Axel Lehmann said on Wednesday that the bank had a “very strong balance sheet” and was “ready to do anything” to solve the problems.
- Lehman dismissed the idea of government assistance to the bank, saying that was “not the point at all”.
- The bank’s largest shareholder, the National Bank of Saudi Arabia, has ruled out injecting more money into the Swiss bank, according to Bloomberg.
- Ammar Al-Khudairi, chairman of the board of directors of the Saudi bank, said it would “absolutely not” invest more money in the beleaguered institution, including for “regulatory and legal” reasons.
to monitor
Wednesday’s drop put Credit Suisse on course for a seventh straight day of losses.
Meat
In its deferred annual report for 2022, released on Tuesday, Credit Suisse disclosed significant cash outflows and said it found weaknesses in its financial reporting. He canceled annual bonuses for senior executives, and said management was working to strengthen risk and control frameworks. Investors reacted poorly and stocks fell for the sixth day in a row. The bank’s dismal results for 2022 came after years of controversy, including ties to investment firm Archegos and supply chain finance firm Greensill Capital – which collapsed and cost the bank billions – and revelations that many clients were involved in cases of corruption, torture, trafficking and other serious crimes, as well as on the spying scandal. The bank made many efforts to turn the company around, including changing management several times.
the shadow
Credit Suisse was at the head of a broader track for bank stocks in Europe on Wednesday. BNP Paribas and Société Générale shares fell more than 10% in Paris, Santander shares fell more than 7% in Madrid and Deutsche Bank shares fell by 8% in Frankfurt. The decline is part of the context of broader financial anxiety, in the wake of the bankruptcies of US banks Silicon Valley Bank and Signature.
Translated article from the American magazine Forbes – Author: Robert Hart
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