Credit Suisse Group AG (NYSE: CS) opened about 10% down this morning even after it secured a $54 billion lifeline from the Swiss National Bank as Invezz reported HERE.
Credit default swaps climbed to a new high of 38.4% this week pinning the bank’s default risk at crisis level. According to Charles-Henry Monchau – the Chief Investment Officer of Syz Bank:
This support from Swiss National Bank and the statement from regulators indicate that Credit Suisse in its current form will continue. However, these measures are not sufficient for Credit Suisse to be completely out of trouble.
The financial services giant is committed to restoring profitability with a rigorous transformation plan it announced late last year but shareholders, so far, appear unconvinced. Versus its year-to-date high, Credit Suisse stock is down over 45% at writing.
Troubles mounted for Credit Suisse stock this month after the collapse of Silicon Valley Bank (read more).
On top of that, its largest investor – Saudi National Bank cited regulatory restrictions and said it won’t increase its stake in “CS” any further. Monchau also said today:
It is about restoring market confidence through the complete exit of the investment bank, a full guarantee on all deposits by the SNB, and an injection of equity capital to give Credit Suisse time to restructure.
Saudi National Bank already owns 9.9% of Credit Suisse Group AG that lost about 38% of deposits in the final quarter of 2022. Wall Street currently has a consensus “underweight” rating on this bank stock.
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