ZURICH: Credit Suisse Group AG said on Thursday it intended to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank, in what it called a “decisive action” to boost its liquidity.
Shares in the major Swiss lender plunged up to 30% on Wednesday after Swiss regulators promised to give Credit Suisse a liquidity lifeline in an unprecedented move by a central bank.
“Credit Suisse intends to exercise its option to borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a covered loan facility as well as a short-term liquidity facility from the Swiss National Bank (SNB) is taking decisive action to consolidate pre-emptively, which are fully collateralized by high-quality assets,” Credit Suisse said in a statement.
It pointed to a common equity Tier 1 capital ratio of 14.1% and an average Liquidity Coverage Ratio (LCR) of 144% at the end of 2022. The latter had improved to about 150% by March 14.
Referring to the expected lending, it said: “This additional liquidity will support Credit Suisse’s core businesses and customers as Credit Suisse takes the necessary steps to create a simpler and more focused bank on customer needs.”
collapse in america Silicon Valley Bank Last week and Signature Bank two days later have sent global bank stocks on a rollercoaster ride.
Gary NgInvestors may be concerned about Silicon Valley Bank and Credit Suisse for different reasons, but both are suffering from the side effects of higher interest rates, said the senior economist at Natixis Corporate & Investment Bank.
“Underlying economic tensions may emerge more frequently … and it is possible to see more black swans in an uncertain environment,” he said.
The Swiss lender’s latest move CEO Ulrich Körner said in an interview earlier on Wednesday that the bank’s “capital, our liquidity base is very strong.”
“We meet and inspect basically all regulatory requirements.”
Credit Suisse Group last month reported its biggest annual loss since the 2008 global financial crisis, when troubled customers pulled billions of dollars from the bank. It warned there would be another “substantial” loss this year.
Switzerland’s second biggest bank has begun a major overhaul of its business, cutting costs and jobs in a bid to revive its fortunes, including creating a separate business for its investment bank under the CSFirst Boston brand. Is. In December the bank raised 4 billion Swiss francs from investors.
On Wednesday it also announced offers for senior debt securities to raise up to 3 billion francs in cash.
The bank said it had also accelerated cost-cutting and was well on track to deliver 2.5 billion francs of cost-basis cuts by 2025, including 1.2 billion francs in 2023.
Shares in the major Swiss lender plunged up to 30% on Wednesday after Swiss regulators promised to give Credit Suisse a liquidity lifeline in an unprecedented move by a central bank.
“Credit Suisse intends to exercise its option to borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a covered loan facility as well as a short-term liquidity facility from the Swiss National Bank (SNB) is taking decisive action to consolidate pre-emptively, which are fully collateralized by high-quality assets,” Credit Suisse said in a statement.
It pointed to a common equity Tier 1 capital ratio of 14.1% and an average Liquidity Coverage Ratio (LCR) of 144% at the end of 2022. The latter had improved to about 150% by March 14.
Referring to the expected lending, it said: “This additional liquidity will support Credit Suisse’s core businesses and customers as Credit Suisse takes the necessary steps to create a simpler and more focused bank on customer needs.”
collapse in america Silicon Valley Bank Last week and Signature Bank two days later have sent global bank stocks on a rollercoaster ride.
Gary NgInvestors may be concerned about Silicon Valley Bank and Credit Suisse for different reasons, but both are suffering from the side effects of higher interest rates, said the senior economist at Natixis Corporate & Investment Bank.
“Underlying economic tensions may emerge more frequently … and it is possible to see more black swans in an uncertain environment,” he said.
The Swiss lender’s latest move CEO Ulrich Körner said in an interview earlier on Wednesday that the bank’s “capital, our liquidity base is very strong.”
“We meet and inspect basically all regulatory requirements.”
Credit Suisse Group last month reported its biggest annual loss since the 2008 global financial crisis, when troubled customers pulled billions of dollars from the bank. It warned there would be another “substantial” loss this year.
Switzerland’s second biggest bank has begun a major overhaul of its business, cutting costs and jobs in a bid to revive its fortunes, including creating a separate business for its investment bank under the CSFirst Boston brand. Is. In December the bank raised 4 billion Swiss francs from investors.
On Wednesday it also announced offers for senior debt securities to raise up to 3 billion francs in cash.
The bank said it had also accelerated cost-cutting and was well on track to deliver 2.5 billion francs of cost-basis cuts by 2025, including 1.2 billion francs in 2023.
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