Asset Classes

Free investment financial education


Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Credit Suisse Down 28% as its Biggest Backer Refuses Additional Help

Posted March 15, 2023 at 11:30 am
Tim Fries
The Tokenist

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 losseskey 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).

Originally Posted March 15, 2023 – Credit Suisse Down 28% as its Biggest Backer Refuses Additional Help

Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.

Disclosure: The Tokenist

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult a licensed financial advisor prior to making financial decisions.

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from The Tokenist and is being posted with its permission. The views expressed in this material are solely those of the author and/or The Tokenist and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.