A Swiss flag flies over the Credit Suisse sign in Bern, Switzerland
FABRICE COFFRINI | AFP | beautiful pictures
Credit Suisse executives are in talks with the bank’s major investors to reassure them amid growing concerns about the financial health of the Swiss lender, Financial Times reportedcite the participants in the discussions.
An executive involved in the negotiations told the Financial Times that teams at the bank were actively interacting with its top customers and partners over the weekend, adding that they had received ” messages of support” from leading investors.
Credit Suisse shares hit a weekly low. The stock is down about 55% so far.
The bank’s credit-debt swap (CDS) spreads, which provide investors with protection against financial risks such as default, rose sharply on Friday. They followed Swiss lender reports looking to raise capitalcited a memo from CEO Ulrich Koerner.
FT said the executive denied report that the Swiss bank had officially reached out to its investors about being able to raise more capital and confirmed Credit Suisse “is trying to avoid such a move with share prices at record lows and spending.” higher borrowing costs due to rating downgrades.”
The bank told Reuters that it is in the process of strategic review including potential divestments and asset sales, and An announcement is expected on October 27when the bank announced third quarter business results.
Credit Suisse has also been in talks with investors to raise capital under a variety of scenarios, Reuters said, citing people familiar with the matter as saying it included the possibility that the bank could “largely ” exit the US market.
John Vail, global strategist at Nikko Asset Management, said on CNBC’s “Squawk Box Asia“in Monday.
“It’s worth noting at the end of this period that central banks are likely to begin to soften slightly as inflation both declines and financial conditions deteriorate significantly,” Vail said. “I don’t think it’s the end of the world.”
Analysts at Citi said a report on the possible “contagion effect” on US banks on US banks by “a major European bank”. Analysts did not name Credit Suisse.
“We understand the nature of the concerns, but the current situation has been unfolding around the clock since 2007 when the balance sheet showed fundamental differences in capital and liquidity,” the report said. The report refers to the financial crisis that broke out in 2007.
“We believe US banking stocks are attractive here,” the report said.
