Credit Suisse shares plunge — RT Business News

The Swiss lender’s biggest backer, the Saudi National Bank, has ruled out further aid

Shares in troubled bank Credit Suisse hit a new all-time low for the second day in a row, losing nearly a quarter of their value, after its largest shareholder refused additional financial aid, Reuters reported on Wednesday.

The Saudi National Bank (SNB), which acquired a 10% stake in the Swiss banking giant in 2023, said it could no longer provide financial assistance, citing regulatory and statutory issues.

“We cannot because we would exceed 10%. It’s a matter of regulations.” Saudi National Bank chairman Ammar Al Khudairy said, quoted by the agency.

According to the executive, the SNB is happy with Credit Suisse’s transformation plan and suggested the bank is unlikely to need additional money.

Saudi Arabia’s largest financial institution and majority-owned by the kingdom’s government, SNB has taken a 9.9% stake in the major Swiss bank as part of Credit Suisse’s fundraising and has pledged to invest up to to 1.5 billion Swiss francs ($1.5 billion).

The Swiss bank’s $4.2 billion capital raise was intended to fund a massive strategic overhaul aimed at improving the performance of its investment banking industry and addressing a wide range of risks and defaults to compliance.

On Tuesday, Credit Suisse, Switzerland’s second-largest bank, released its annual report for 2022 saying it had identified material weaknesses in controls over financial reports and customer outflows not yet stemmed.

The lender is currently trying to recover from a series of scandals that have shaken investor and customer confidence, and billions in losses. Customer outflows in the fourth quarter totaled more than 110 billion Swiss francs ($120 billion).

The heads of major Swiss banks have warned that the country’s decision to back Ukraine-related sanctions against Russia is having a negative impact on their business, the Financial Times reported on Thursday.

Anonymous banking officials told the outlet that China’s wealthy clientele had serious concerns about depositing their money in Swiss banks, after Bern abandoned its policy of neutrality by freezing billions in Russian assets as part of the sanctions.

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