Credit Suisse: Another roller coaster session in Zurich

( – After its rebound the day before, Credit Suisse shares fell sharply this Friday on the Zurich Stock Exchange amid persistent concerns about the financial strength of the second Swiss bank.

By dropping more than 9% today, the title continues its yo-yo movement started at the beginning of the week, investors alternating, in turn, massive sales on the value before acclaiming it the next day.

Since the beginning of the week, its share price has fallen by more than 25%, which, unless there is a spectacular trend reversal between now and the close, should correspond to its final weekly decline.

This new roller coaster session underlines above all the lack of confidence of investors in the health of the establishment, despite the efforts undertaken by the Swiss authorities to try to restore calm.

‘The enormous lifeline offered by the Swiss National Bank (SNB) this week will allow it to solve its immediate cash flow problems, but this is probably not the end of the story in view of the fundamental difficulties affecting the bank’, say analysts at Capital Economics.

‘The loan of 50 billion Swiss francs from the SNB will not, on its own, save the bank because it is ultimately small in terms of the figures,’ confirms Matthieu Bailly, Deputy CEO at Octo AM.

The bond manager points out that deposits, a source of financing and therefore of the bank’s profitability, fell by 320 billion Swiss francs over the year 2022, with outstandings which fell from 1,614 to 1,294 billion.

At Invesco, we recall that Credit Suisse is considered a “systemic” bank with its 531 billion Swiss francs in assets, “an amount that is very unpleasantly reminiscent of the Lehman Brothers file”, recalls the asset manager.

“This series of negative news and events comes at a time when the bank is struggling to convince investors of the possibility of success of the reorganization plan and the repositioning of its business model”, underlines Xavier Got, senior credit analyst at Generali Investments .

For all these reasons, the Swiss bank now seems to be going through a crisis of confidence on the part of investors.

‘As other financial institutions have experienced in the past, when the trust of counterparties is lost, the conduct of a bank’s day-to-day activities becomes impossible’, recalls Xavier Got.

“It is therefore crucial for Credit Suisse to restore market confidence,” said the Generali analyst.

For professionals, this path still looks very long and strewn with pitfalls.

‘The era of shareholder support and capital increases seems to be over as the setbacks are heavy and the disappointments recurrent,’ warns Matthieu Bailly, at Octo AM.

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