London, Europe Brief News – Credit Suisse shares plunged more than 20 percent to new record lows after its main shareholder said it would not provide more financial assistance to the embattled Swiss banking giant.
Switzerland’s second-biggest bank, shaken by a series of scandals, was rocked once again after Saudi National Bank chairman Ammar Al Khudairy said it would “absolutely not” up its stake, as European stock markets plunged amid renewed concerns about the banking sector.
Credit Suisse’s market value had already suffered heavy falls this week over fears of contagion from the collapse of two US banks and its annual report citing “material weaknesses” in internal controls.
Credit Suisse shares were soon in freefall on the Swiss stock exchange, hitting a low of 1.71 Swiss francs just before 1100 GMT — down 22.2 percent.
“Where one big shareholder goes, others may follow. Credit Suisse now has to come with a concrete plan to stop outflows, and do it fast,” IG analyst Chris Beauchamp told AFP.
Neil Wilson, chief market analyst at trading firm Finalto, said it seemed there were “increasingly worried investors and counterparties looking at Credit Suisse”.
“If Credit Suisse were to run into serious existential trouble, we are in a whole other world of pain. It really is too big to fail.”
Speaking at the Financial Sector Conference in Saudi Arabia on Wednesday, Credit Suisse chairman Axel Lehmann said the bank did not need government assistance, saying it “isn’t a topic”.
He said it would be inaccurate to compare his bank’s woes with the collapse of the US lender Silicon Valley Bank (SVB), due to the difference in regulation.
“We have strong capital ratios, a strong balance sheet,” Lehmann said, adding: “We already took the medicine,” referring to the bank’s drastic restructuring plan revealed in October.