ZURICH: Credit Suisse Group AG mentioned on Thursday it supposed to borrow as much as 50 billion Swiss francs ($54 billion) from the Swiss National Bank in what it known as “decisive action” to spice up its liquidity.
The deliberate transfer got here after Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unparalleled transfer by means of a central financial institution after the flagship Swiss lender’s stocks fell by means of up to 30% on Wednesday.
“Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets,” Credit Suisse mentioned in a commentary.
It pointed to its end-2022 Common Equity Tier 1 capital ratio of 14.1% and moderate liquidity protection ratio (LCR) of 144%. The latter had advanced to about 150% by means of March 14, it mentioned.
Referring to the supposed borrowing, it mentioned: “This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.”
The collapses in america of Silicon Valley Bank Last week and Signature Bank two days later have despatched world financial institution shares on a rollercoaster experience.
Gary Ngsenior economist at Natixis Corporate and Investment Bank, mentioned traders may well be frightened about Silicon Valley Bank and Credit Suisse for various causes, however each suffered from the aspect impact of high-interest charges.
“The underlying economic stress may emerge more frequently … and it is possible to see more black swans in an uncertain environment,” he mentioned.
The Swiss lender’s newest transfer got here after CEO Ulrich Koerner mentioned in an interview previous on Wednesday that the financial institution’s “capital, our liquidity basis is very very strong.”
“We fulfill and overshoot basically all regulatory requirements.”
Credit Suisse Group final month reported its largest annual loss because the 2008 world monetary disaster after rattled purchasers pulled billions of greenbacks from the financial institution. It warned {that a} additional “substantial” loss would come this yr.
The financial institution, Switzerland’s 2d largest, has begun a significant overhaul of its industry, reducing prices and jobs to restore its fortunes, together with making a separate industry for its funding financial institution underneath the CS First Boston logo. The financial institution raised 4 billion Swiss francs from traders in December.
On Wednesday, it additionally introduced gives for senior debt securities for money of as much as 3 billion francs.
The financial institution mentioned it had additionally speeded up charge cuts and used to be smartly on course to ship 2.5 billion francs of cost-base discounts by means of 2025, together with 1.2 billion francs in 2023.
The deliberate transfer got here after Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unparalleled transfer by means of a central financial institution after the flagship Swiss lender’s stocks fell by means of up to 30% on Wednesday.
“Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets,” Credit Suisse mentioned in a commentary.
It pointed to its end-2022 Common Equity Tier 1 capital ratio of 14.1% and moderate liquidity protection ratio (LCR) of 144%. The latter had advanced to about 150% by means of March 14, it mentioned.
Referring to the supposed borrowing, it mentioned: “This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.”
The collapses in america of Silicon Valley Bank Last week and Signature Bank two days later have despatched world financial institution shares on a rollercoaster experience.
Gary Ngsenior economist at Natixis Corporate and Investment Bank, mentioned traders may well be frightened about Silicon Valley Bank and Credit Suisse for various causes, however each suffered from the aspect impact of high-interest charges.
“The underlying economic stress may emerge more frequently … and it is possible to see more black swans in an uncertain environment,” he mentioned.
The Swiss lender’s newest transfer got here after CEO Ulrich Koerner mentioned in an interview previous on Wednesday that the financial institution’s “capital, our liquidity basis is very very strong.”
“We fulfill and overshoot basically all regulatory requirements.”
Credit Suisse Group final month reported its largest annual loss because the 2008 world monetary disaster after rattled purchasers pulled billions of greenbacks from the financial institution. It warned {that a} additional “substantial” loss would come this yr.
The financial institution, Switzerland’s 2d largest, has begun a significant overhaul of its industry, reducing prices and jobs to restore its fortunes, together with making a separate industry for its funding financial institution underneath the CS First Boston logo. The financial institution raised 4 billion Swiss francs from traders in December.
On Wednesday, it additionally introduced gives for senior debt securities for money of as much as 3 billion francs.
The financial institution mentioned it had additionally speeded up charge cuts and used to be smartly on course to ship 2.5 billion francs of cost-base discounts by means of 2025, together with 1.2 billion francs in 2023.