Economics & Finance

Credit Suisse bank to borrow $53.6 billion from the Swiss National Bank

by teleSUR

Credit Suisse (CS) announced Thursday that it would borrow 50 billion Swiss francs (about 53.689 billion dollars) from the Swiss National Bank (SNB).

Switzerland’s second-largest bank saw its shares fall to an all-time low on Wednesday, down 30 percent. The multibillion-dollar loan is aimed at “preemptively bolstering its liquidity.”

The bank’s shares opened at 2.28 Swiss francs per share on Wednesday morning, before falling to 1.55, and closing at an all-time low of 1.70. However, Credit Suisse shares are up 40 percent Thursday following the loan announcement.

The CS investment bank’s CEO Ulrich Koerner addressed a memo to the bank’s employees in which he said that “at times like these, it is important to focus on the facts and reinforce the bank’s strengths.”

“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” the CEO said.

The failure of Silicon Valley Bank (SVB) in the U.S. last week has sparked fears of a crisis in the U.S. banking sector, driving European bank share prices plummeting. Asian markets have also traded lower in the wake of the U.S. financial situation.

On Wednesday, Saudi National Bank, CS’s main shareholder, announced that it would not increase its stake in the Swiss bank. This is related to the bank’s investment losses in 2022 (CHF 7.3 billion), as well as a “material weakness” in internal controls over financial reporting.

The Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) said in a joint statement on Wednesday that they would provide liquidity to the bank if needed.

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