20.7 C
Sunday, May 28, 2023
HomeNewsBanking crisis.. Credit Suisse Bank shares lose 30%, reaching a new historical...

Banking crisis.. Credit Suisse Bank shares lose 30%, reaching a new historical low


The bank recorded a net loss of 7.3 billion Swiss francs ($7.8 billion) for the fiscal year 2022.

Shares in Credit Suisse fell more than 30 percent to a new record low on Wednesday after its major shareholder said it would no longer provide financial assistance to the ailing Swiss banking giant.

The Saudis rushed to help Credit Suisse by participating in its capital in November.

However, the National Bank of Saudi Arabia, the largest shareholder in Credit Suisse, “does not have” plans to increase investment in the Swiss bank for “several reasons”, according to what was announced by its chairman, Ammar Al-Khudairi, adding that the simplest of them are “regulatory” issues.

At 1312 GMT, Switzerland’s second largest bank saw its share price drop by 30.13 percent to just CHF 1,565 per share, reaching a new historic low.

The market value of Credit Suisse witnessed severe declines this week due to fears of transmission of the collapse of two US banks, in addition to its annual report, which indicated “fundamental weaknesses” in internal controls.

Speaking at a financial sector conference in Saudi Arabia on Wednesday, Axel Lehmann, Chairman of the Board of Directors of Credit Suisse Bank, said that the bank does not need government assistance, adding that it would be inaccurate to compare the problems it faces with the collapse of the American “Silicon Valley Bank” (EVB), Because of the difference in organization.

“We have strong capital ratios and a strong balance sheet,” Lehman said, noting that they have begun implementing the bank’s radical restructuring plan, which it unveiled in October.

But his speech did not appear to stem the fall in the value of his shares or prevent fears from spreading beyond Switzerland’s borders.

On Wednesday, French Prime Minister Elisabeth Born called on the Swiss authorities to intervene and “settle” the problem, adding that the French and Swiss finance ministers were scheduled to speak during the next few hours.

For his part, said analyst at the “Finalto” trading company, Neil Wilson, “If Credit Suisse is really facing an existential problem, then we will be facing a real bitter reality. The bank is believed to be too big to fall.”

Credit Suisse is one of 30 banks in the world that is too big to fail, which forces it to allocate more cash to face any crisis.

The bank recorded a net loss of 7.3 billion Swiss francs ($7.8 billion) for the fiscal year 2022.

This came after massive withdrawals of funds by its clients, including in the wealth management sector, which is one of the activities that the bank intends to refocus on as part of a major restructuring plan.

The rise in gold prices

On Wednesday, gold rose more than 1 percent to the highest level since early February, as a crisis in the banking sector drove investors away from riskier assets and led them to the yellow metal as a safe haven.

Gold rose in spot transactions 1.1 percent to 1923 dollars an ounce (an ounce) by 1353 GMT, and US gold futures contracts increased 0.9 percent, recording 1928.60 dollars.

Banking stocks in Europe came under more pressure again, with Credit Suisse falling.

And gold increased despite a sharp jump in the dollar, which usually puts pressure on demand for gold denominated in the US currency.

The focus remains on the next move of the Federal Reserve (Central US) regarding interest rates.

Gold is usually considered a hedge against inflation, but higher interest rates increase the opportunity cost of holding non-yielding gold.

As for other psychological metals, silver increased in spot transactions by 2.1 percent to $22.15 an ounce, while platinum fell 2.6 percent to $957.01 and palladium 2.6 percent to $1467.73.

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

Latest stories