Credit Suisse shares slip as much as 10%
ZURICH: Credit Suisse shares slid by as much as 10 per cent on Monday, reflecting market concerns ahead of a restructuring plan due to come with third-quarter results at the end of October.
Swiss regulator FINMA and the Bank of England in London, where the lender has a major hub, were monitoring the situation at Credit Suisse and working closely together, a source familiar with the situation said.
Credit Suisse’s recent problems were well known and there had been no major recent developments, the source added.
The Bank of England, FINMA and the Swiss finance ministry declined to comment.
Chief Executive Ulrich Koerner last week told staff that Credit Suisse, whose market capitalisation had dropped to 9.73 billion Swiss francs ($9.85 billion) on Monday, has solid capital and liquidity.
And bank executives spent the weekend reassuring large clients, counterparties and investors about its liquidity and capital, the Financial Times reported on Sunday.
A Credit Suisse spokesman declined to comment on the FT report, which said the weekend calls followed a sharp rise in spreads on the bank’s credit default swaps (CDS), which offer protection against a company defaulting on its debt.
Credit Suisse’s euro-denominated bonds dropped to record lows, with the Swiss bank’s longer-dated bonds suffering the sharpest declines. In July, Credit Suisse announced its second strategy review in a year and replaced its CEO, bringing in restructuring expert Koerner to scale back investment banking and cut more than $1 billion in costs.
It has said it was considering measures to strengthen its flagship wealth management franchise, scale back its investment bank into a “capital-light, advisory-led” business, and evaluate strategic options for the Securitized Products business.