Credit Suisse announced it will borrow up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank on a secured loan facility and short-term liquidity facility.
The decision is made immediately after the lender’s shares decline It hit an all-time low for a second straight day on Wednesday after its top investor Saudi Arabia’s National Bank said it would be unable to provide further support.
The latest steps will “support Credit Suisse’s core customers and businesses as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around the needs of its customers. goods,” the company said in a statement. Notification.
In addition, the bank is offering a cash tender involving ten senior US dollar debt securities totaling up to $2.5 billion – as well as a separate offer for four Euro-denominated debt securities totaling up to 500 million euros, the company said.
Credit Suisse CEO Ulrich Koerner said: “These measures represent decisive action to strengthen Credit Suisse as we continue to transform our strategy to deliver value to our customers and other stakeholders. “.
He said: “We thank SNB and FINMA as we make our strategic transformation. Me and my team are determined to move fast forward to deliver a simpler and more centralized bank built in. built on the needs of the customer”.
US futures contracts escalate, with Dow Jones Industrial Average futures contracts rose more than 100 points after the announcement. S&P 500 Futures Contract also increased by 0.45% and Nasdaq 100 futures 0.54% increase.
Banks ‘connected’
Following the Credit Suisse story, the founder of Tabbush Reports, Daniel Tabbush, emphasized that the bigger concern for the banking sector is trust.
“The obvious issue is restoring confidence and preventing the flight of deposits, which the central bank may have partially or fully solved this problem,” he told CNBC’s “Street Signs Asia” program. “.
Credit Suisse’s timeline
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“But what’s more difficult is not simply dealing with its problems, but actually how this feeds information to so many interconnected banks that have Swiss Credit contracts. Switzerland – where the derivatives are, where the facilities are – it’s really a matter of next order,” he said.
Banks in Asia-Pacific have also pared some of their previous losses – Japan’s Topix previously fell more than 2% and last traded 1.4% lower.
Credit Suisse announced late Wednesday that it will borrow up to about $54 billion from the Swiss National Bank. People walk past Credit Suisse’s headquarters in New York on March 15, 2023 in New York City.
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The Commonwealth Bank of Australia has reduced most of its losses in volatile trading – it trades 0.15% lower after falling as much as 1.97% previously. Westpac Bank And National Australia Bank down to 2.35% and 1.81% respectively before removing some of the reductions. In the end, they fell by 1.34% and 0.58%, respectively.
Some South Korean banks also fell as much as 2% earlier before reversing some of the decline.
The Swiss francs remained volatile after the announcement, up 0.17% to 0.9315 against the US dollar. The Japanese yen also stronger to trade at 132.86 against the greenback.
Earlier this week, Credit Suisse president Axel Lehmann told CNBC’s Hadley Gamble that the recent collapse of the Silicon Valley Bank was “local and limited.”
Asked if he would rule out some form of government support in the future, Lehmann said: “We’re managed, we’ve got solid capital ratios, a very solid balance sheet. . We’re all ready. So that’s not the point.”
– Lim Hui Jie of CNBC contributed to this report.
