ZURICH, Oct 3 (Reuters) – Credit Suisse shares fell around 10% in early trading on Monday amid rising Credit Default Swaps (CDS) and concerns over the state of the Swiss bank’s liquidity. finalizes a restructuring expected on October 27.
Management contacted key customers and investors over the weekend to try to reassure them after the bank’s CDS, financial protection contracts surged on Friday, the Financial Times reported on Sunday.
Contacted by Reuters, a Credit Suisse spokesperson declined to comment on the information. Ulrich Krner, managing director of Credit Suisse, said last week that the bank had strong capital and liquidity.
Credit Suisse shares, which have lost around 60% this year, were down around 9% by mid-morning, bottom of the STOXX 600.
In a note, JP Morgan analysts judge that in view of the bank’s financial data at the end of the second quarter, the capital and liquidity of Credit Suisse are “healthy”.
As the bank has indicated its short-term intention to maintain its CET1 capital ratio at 13-14%, the end-of-quarter ratio is within this range and the liquidity coverage ratio is well above requirements, the note adds. .
At the end of the second quarter, Credit Suisse had 727 billion Swiss francs in assets (750 billion euros), according to JP Morgan.
The widening of Credit Suisse’s CDS spreads is part of a move in this direction across the industry, which was expected in an environment of rising interest rates and macroeconomic uncertainty, analysts said. (Report by Michael Shields; French version Elena Vardon,)