Credit Suisse’s top shareholder Saudi National Bank rules out more financial assistance, stock falls 20%

Credit Suisse Group AG’s top shareholder has ruled out providing more financial assistance to the bank. It cited regulatory issues for its decision to step back. 

When asked by Bloomberg TV if the Saudi National Bank was open to assist Credit Suisse with additional liquidity, Chairman Ammar Al Khudairy said ‘absolutely not’. “The answer is absolutely not, for many reasons outside the simplest reason which is regulatory and statutory,” said the Chairman, as mentioned in a report in Bloomberg. 

Saudi National Bank, whose 37 per cent is owned by the kingdom’s sovereign wealth fund, became Credit Suisse’s biggest shareholder following an acquisition of 9.9 per cent last year. 

Trading in the Swiss bank's shares was halted late morning as they fell by a fifth to fresh record lows, having been pummelled earlier in the week in market fallout from the collapse of Silicon Valley Bank.

Switzerland's second-biggest bank is seeking to recover from a string of scandals that have undermined the confidence of investors and clients. Customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion).

Al Khudairy said SNB was happy with Credit Suisse's turnaround plan and did not think it would need more money, but also described his bank's investment as an opportunistic onethat was not time-dependent. The Saudi bank would exit when proper value to the shares had been acquired, he added.

"We are happy with the plan, the transformation plan that they have put forward. It is a very strong bank," Al Khudairy said on the sidelines of a conference in Riyadh.

"I don't think they will need extra money; if you look at their ratios, they're fine. And they operate under a strong regulatory regime in Switzerland and in other countries."

At 1046 GMT, Credit Suisse shares were trading down 20% at 1.7840 Swiss francs.

The bank’s chairman Axel Lehmann said that the bank is looking to shore up confidence among clients amid a series of missteps. 

Meanwhile, on Tuesday, Credit Suisse’s bonds tumbled with some prices record lows, after it said that customer outflows have stabilised but not reversed. The bank’s dollar-denominated additional tier 1 bonds fell over four cents with many prices hitting record lows. In its 2022 annual report published on Tuesday, Credit Suisse said customer "outflows stabilised to much lower levels but had not yet reversed as of the date of this report". 

(With Reuters inputs)

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