A Credit Suisse Group AG bank branch in Bern, Switzerland, on Thursday, March 16, 2023.
Stefan Wermuth | Bloomberg | Getty Images
Credit Suisse shares soared more than 30% at Thursday’s market open after the bank said it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.
The Swiss-listed stock’s rally cooled slightly during the day’s trading, but the shares were still up 18.8% as markets closed in the afternoon.
The embattled lender announced late Wednesday that it would exercise its option to borrow from the Swiss central bank under a covered loan facility and a short-term liquidity facility.
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.”
Credit Suisse also offered to buy back around 3 billion francs’ worth of debt, relating to 10 U.S. dollar-denominated senior debt securities and four euro-denominated senior debt securities.
“These measures demonstrate decisive action 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 the release Wednesday.
“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.”
The stock of Credit Suisse, Switzerland’s second-largest bank, began to slide at the start of the week, along with many other European banks, on fears of contagion in light of the collapse of Silicon Valley Bank.
The Swiss bank’s losses deepened on Tuesday after it announced in its delayed annual report that “material weakness” had been found in its financial reporting in 2021 and 2022, although it said this did not affect the accuracy of the bank’s financial statements.
Credit Suisse’s shares plunged to a fresh all-time low for the second consecutive day on Wednesday after the Saudi National Bank — a top investor — said it would not pump in any more cash due to regulatory restrictions.
The Saudi National Bank took a 9.9% stake in Credit Suisse as part of the lender’s $4.2 billion capital raise to fund a massive strategic overhaul, aimed at improving investment banking performance and addressing a litany of risk and compliance failures.