Credit Suisse shares plummet to a new all-time low after key backer rules out further financial aid.
Shares of Credit Suisse on the New York Stock Exchange (NYSE) fell over 28% at a fresh all-time low of $1.79 after Saudi National Bank (SNB) said it would stop providing further financial assistance to the Swiss lender due to regulatory issues. The bank’s shares on the SIX Swiss Exchange were also down more than 26% at 1.64 CHF.
Credit Suisse Stock Hits a New Record Low for Second Consecutive Day
Credit Suisse shares tumbled to a new record low for the second consecutive day, dropping more than 28% in premarket trading Wednesday. After several trading halts this morning, the bank’s stock stood at $1.79 ahead of the market open.
The drop comes after SNB, Credit Suisse’s biggest investor, said it is cutting further financial assistance to the Swiss bank, Reuters reported. SNB said the move comes due to regulatory challenges.
“We cannot because we would go above 10%. It’s a regulatory issue.”– said Saudi National Bank Chairman Ammar Al Khudairy.
On the other hand, Al Khudairy said SNB is content with Credit Suisse’s current transformation program, indicating that the embattled bank was unlikely to need further financial aid. SNB, the largest commercial bank in Saudi Arabia, acquired a 9.9% stake in Credit Suisse in 2022 amid the Swiss bank’s $4.2 billion capital raise. The transaction aimed to fuel a massive strategic overhaul to prop up its investment banking business and address risk and compliance failures.
Credit Suisse Declares “Material Weaknesses” in its Annual Report
It seems there is no end to Credit Suisse’s woes. Just a day before SNB’s exit, the bank said it had discovered “material weaknesses” in its financial reporting processes for 2022 and 2021. The Swiss lender disclosed the flaws in its annual report, which was due to come out on Thursday but was delayed following a late call from the U.S. Securities and Exchange Commission (SEC).
In the report, the bank said weaknesses were related to “failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements,” as well as several internal control and communication flaws.
Over the past year, Credit Suisse’s stock nosedived more than 76% following several scandals, including substantial losses, key dealmaker departures, and massive withdrawals. The stock price decline has picked up pace as investors jumped ship amid a banking crisis triggered by the collapse of the Silicon Valley Bank (SVB).
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Originally Posted March 15, 2023 – Credit Suisse Down 28% as its Biggest Backer Refuses Additional Help
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