(BFM Bourse) – The title of the Swiss bank recovered on Thursday after falling 24.24% the day before, thanks to the support of the Swiss authorities.
The day after. The day after the worst session in its history, with a plunge of 24.24%, the title Credit Suisse is recovering violently. The action jumped over 30% on the Zurich Stock Exchange at the start of trading on Thursday. The title thus erases most of its decline on Wednesday, moving down 3% from Tuesday’s close.
In its wake the other European banks, which had plunged on Wednesday, are regaining ground. Societe Generale takes 1.1% and BNP Paribas 1.7%, around 9:20 a.m. on the Paris Stock Exchange.
On Tuesday, the action of the Swiss establishment unscrewed after the president of the Saudi National Bank, Ammar Al Khudairy, declared on Bloomberg TV that it was out of the question that his group, the largest shareholder of Credit Suisse with nearly of 10%, injects liquidity into the Swiss bank if it were to need it.
A credit facility of 50 billion Swiss francs
This statement brought to the fore the structural problems of the group, which had to recapitalize at the end of 2022. The premiums on its CDS – hedging instruments against the risk of default on its loans – are climbed to agonizing levels on Wednesday.
Swiss authorities decided to act late Wednesday evening to appease the market. The Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (Finma) issued a joint statement to ensure that the country’s second-largest bank met the required capital requirements. They also indicated that the SNB would make liquidity available to Credit Suisse if necessary.
Overnight, the bank then announced that it was exercising an option to borrow up to 50 billion Swiss francs (50.8 billion euros). Credit Suisse will also launch an offer to buy 3 billion Swiss francs of debt securities.
“Strengthening liquidity and the support of the Swiss National Bank, with the support of Finma, are positive elements. Recovering confidence is essential for Credit Suisse shares. The measures should comfort the market in the fact that the repercussions on the whole sector can be contained, but the situation remains uncertain”, analyzes Royal Bank of Canada in a note.
Julien Marion – ©2023 BFM Bourse