By Jihye Lee - CNBC via
NBC News
Swiss bank Credit Suisse announced Thursday that it will borrow up to 50 billion Swiss francs (about $53.7 billion) from the Swiss National Bank (SNB) through a covered credit facility and a short-term liquidity facility. , in order to tackle the crisis that threatens the entity.
The decision has sent its shares rebounding 20% after plunging 24% on Wednesday, hitting a record low for the second day in a row, after its main investor, the Saudi National Bank, said it would not be able to provide more help.
An office of the Swiss bank Credit Suisse in Geneva, Switzerland, on March 15, 2023.Fabrice Coffrini / AFP - Getty Images
The Saudi entity justified its decision based on "a regulatory issue", which prevents its participation from exceeding 10%.
Last year it acquired 9.9% in Credit Suisse as part of the Swiss bank's $4.2 billion capital increase to carry out a massive restructuring aimed at improving its performance.
The latest measures adopted "will support Credit Suisse's core businesses and customers as Credit Suisse takes the necessary steps to create a simpler bank focused on customer needs," the entity explained in a statement.
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The bank is also preparing a cash tender offer for ten US dollar-denominated senior debt securities for a total amount of up to $2.5 billion, as well as a separate offer for four euro-denominated senior debt securities for a total amount of up to 500 million euros (about 530 million dollars), according to the company.
"These steps demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our customers and other stakeholders," said Ulrich Koerner, CEO of Credit Suisse.
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“We thank the SNB and FINMA (the Swiss Financial Markets Supervisory Authority) for our strategic transformation.
My team and I are determined to move quickly to offer a bank that is simpler and more focused on the needs of customers, ”he said.
The Swiss National Bank announced on Wednesday night that it would provide liquidity to Credit Suisse "if necessary", after confirming that the bank meets capital requirements and denying that there is a risk of contagion in the Swiss banking sector, especially after the bankruptcies of the US entities Silicon Valley Bank and Signature Bank last week, which aggravated the fear in the markets of a new financial crisis.
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The loan announcement had an immediate impact on the markets.
The Dow Jones futures gained more than 100, the S&P 500 index 0.45%, and the Nasdaq 100 rose 0.54%.
Banks in the Asia-Pacific region also pared some of their losses from the previous day, with Japan's Topix slumping more than 2% and trading 1.4% lower.
