Credit Suisse hits record low, biggest backer says can't put up more money
$Credit Suisse Group AG(CS)$ shares slid on Wednesday, dropping by as much as 10.5% to a new record low, as its largest investor said it could not provide the Swiss bank with more financial assistance.
"We cannot because we would go above 10%. It’s a regulatory issue," said Saudi National Bank(1180.SE)chairman Ammar Al Khudairy saidon Wednesday.
The Saudi lender acquired a stake of almost 10% last year after it took part in Credit Suisse's capital raising and committed to investing up to 1.5 billion Swiss francs ($1.5 billion).
Credit Suisse on Tuesday published its annual report for 2022 saying the bank had identified "material weaknesses" in controls over financial reporting and not yet stemmed customer outflows.
Switzerland's second-biggest bank is seeking to recover from a string of scandals that have undermined the confidence of investors and clients. Customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion).
The shares were last down 10.2% at 2.01 Swiss francs ($2.19) in Zurich, heading for a seventh straight daily decline.
The cost of insuring the company's bonds against default also shot up. Five-year credit default swaps on Credit Suisse debt widened to 533 basis points from 549 bps at last close, according to data from S&P Global Market Intelligence.
The broader equity markets dropped sharply, reversing earlier gains, as the drop in Credit Suisse shares reignited some of the jitters among investors about the resilience of the global banking system in the wake of the collapse of $SVB Financial Group(SIVB)$.
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The bank then tried to explain it as "material deficiencies" in past 2 yrs reporting.
Think accuracy in details is very important...