Swiss credit announced it would borrow up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank under a secured credit facility and a short-term liquidity facility.
The decision comes shortly after shares in the lender fell sharply on Wednesday, hitting a second consecutive day of all-time lows after key investor Saudi National Bank said it will not be able to provide further aid.
The latest moves will “support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more client-centric bank,” the company said in an announcement.
In addition, the bank is making a cash offer for ten US dollar-denominated senior notes for a total purchase price of up to US$2.5 billion – and a separate offer for four euro-denominated senior notes for a total of up to €500 million the company with.
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“These actions demonstrate determined action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” said Ulrich Koerner, CEO of Credit Suisse.
“We would like to thank the SNB and FINMA for implementing our strategic transformation. My team and I are committed to moving fast to create a simpler and more customer-centric bank,” he said.
US futures climbed along Dow Jones industry average Futures gaining more than 100 points after the announcement. S&P 500 futures also rose 0.45% and Nasdaq 100 futures rose 0.54%.
“Affiliate” Banks
In the wake of the Credit Suisse saga, Tabbush Report founder Daniel Tabbush emphasized that trust is a broader concern for the banking sector.
“The obvious problem is restoring confidence and stopping the flight of deposits, which may have been partially or fully addressed by the central bank,” he told CNBC’s Street Signs Asia.
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Chronicle of Credit Suisse
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“But what’s harder, not just containing its problems, is really how that affects so many interconnected banks, where there’s Credit Swiss contracts – where there’s derivatives, where there’s facilities – which is really the next order problem.” is,” he said.
Asia-Pacific banks also erased some earlier losses – the Japanese Topix previously fell more than 2% and was last trading 1.4% lower.
Credit Suisse announced late Wednesday that it will borrow up to $54 billion from the Swiss National Bank. People walk past the Credit Suisse New York headquarters on March 15, 2023 in New York City.
Spencer Platt | News from Getty Images | Getty Images
The Commonwealth Bank of Australia was able to erase most of its losses in volatile trading – it traded 0.15% lower after previously falling as much as 1.97%. Westpac Banking And National Bank of Australia fell as much as 2.35% and 1.81% respectively before erasing some falls. They were last down 1.34% and 0.58% respectively.
Some South Korean banks also fell earlier, falling as much as 2% before partially reversing the declines.
The Swiss franc remained volatile following the announcement, up 0.17% to 0.9315 against the US Dollar. The Japanese yen also strengthened further to trade at 132.86 against the greenback.
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Earlier this week, Credit Suisse chairman Axel Lehmann told CNBC’s Hadley Gamble that the recent Silicon Valley bank collapse was “local and limited.”
When asked if he would rule out government aid in the future, Lehmann said: “We are regulated, we have strong capital ratios, very strong balance sheets.
– CNBC’s Lim Hui Jie contributed to this report.
https://www.cnbc.com/2023/03/16/credit-suisse-to-borrow-up-to-about-54-billion-from-swiss-national-bank.html
