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Credit Suisse shares slumped again on Friday, as the Swiss bank struggles to convince investors that a series of moves will restore its finances.
By afternoon trade in Zurich, Credit Suisse’s stock
CSGN,
CS,
dropped by another 7%.
Its stock has dropped 26% this week, marking the worst weekly performance since the 2008 financial crisis.
Credit Suisse, as well as its Swiss regulators, have insisted that it doesn’t have the problems with falling bond prices in portfolios facing U.S. banks, such as the collapsed SVB Financial. Credit Suisse says it will borrow up to 50 billion francs ($54 billion) from the Swiss National Bank as it also launched an offer to buy back 3 billion francs worth of its debt.
Credit Suisse has its own difficulties, stemming from a series of scandals that has resulted in five consecutive losing quarters, and outflows of about $100 billion from its wealthy clients in the fourth quarter.
In its annual report this week, Credit Suisse admitted to material financial control problems.
Its stock saw renewed pressure after the chairman of its top shareholder, Saudi National Bank, said it would not invest more in the Swiss bank, though he has subsequently clarified that he was not asked to, and that the red line is not increasing its 9.9% ownership threshold.
Rating agency DBRS Morningstar downgraded its credit rating on Credit Suisse to Triple-B, which is still investment grade, from Single A. It said Credit Suisse “continues to report missteps and compliance failures, resulting in a visible weakening of the franchise as evidenced by the high level of deposit outflows in the fourth quarter of 2022, alongside high costs.”
It said its wealth management division has not been resilient as expected, “and this weakness appears likely to continue.”
