Credit Suisse Stock Surges 20% After Swiss National Bank Loan News

Credit Suisse shares surged over 30% at the opening of the market on Thursday, March 16, 2023, after the bank announced it would borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank. While the rally cooled slightly, shares were still up 21.8% at 10:02 a.m. London time.

Boosting Financial Standing

Credit Suisse, which has been embattled in recent weeks, said it would exercise its option to borrow from the Swiss central bank under a covered loan facility and a short-term liquidity facility. In a statement, the Swiss National Bank and the Swiss Financial Market Supervisory Authority said Credit Suisse “meets the capital and liquidity requirements imposed on systemically important banks.”

The bank also offered to buy back around 3 billion Swiss francs’ worth of debt, relating to 10 U.S. dollar-denominated senior debt securities and four euro-denominated senior debt securities.

Credit Suisse CEO Ulrich Koerner said in a release that these measures demonstrated “decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders.” He added that his team is “resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”


Reassuring Investors Amid Deepening Losses

Credit Suisse’s stock began to slide earlier this week on fears of contagion in light of the collapse of Silicon Valley Bank. The bank’s losses deepened on Tuesday after it announced in its delayed annual report that “material weakness” had been found in its financial reporting in 2021 and 2022, although it said this did not affect the accuracy of the bank’s financial statements.

On Wednesday, Credit Suisse’s shares plunged to a fresh all-time low for the second consecutive day after the Saudi National Bank, a top investor, said it would not pump in any more cash due to regulatory restrictions. The Saudi National Bank had taken a 9.9% stake in Credit Suisse as part of the lender’s $4.2 billion capital raise to fund a massive strategic overhaul aimed at improving investment banking performance and addressing a litany of risk and compliance failures.

Credit Suisse’s decision to borrow from the Swiss National Bank and its offer to buy back debt have given investors confidence that the bank is taking steps to address its issues. The Swiss National Bank’s statement that Credit Suisse meets capital and liquidity requirements has also reassured investors.