Credit Suisse handed a lifeline to avert collapse
Shares in embattled Swiss bank have plummeted amid a growing Western banking crisis
Credit Suisse announced on Thursday it would borrow up to 50 billion Swiss francs ($53.7 billion) from the country’s central bank, Swiss National Bank, to reassure investors the embattled bank has enough money to stay afloat.
The announcement comes a day after shares in Switzerland’s second-biggest bank saw a decline of nearly 25%, hitting all-time lows for two consecutive days. The drop occurred after Credit Suisse’s biggest investor, Saudi National Bank (SNB), said it wouldn’t be able to provide further financial assistance.
In addition to the loan from the Swiss National Bank, Credit Suisse also said it repurchased billions of dollars of its own debt to manage the liabilities and interest-payment expenses. The offer covers $2.5 billion of US dollar bonds and €500 million ($529 million) of euro bonds.
“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” Credit Suisse CEO Ulrich Koerner said.
The executive thanked Switzerland’s central bank and the Swiss Financial Market Supervisory Authority (FINMA) for helping to execute the investment bank’s strategic transformation.
“My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs,” Koerner said.
The Zurich-based bank has been battling recently to recover from a string of scandals and losses that have shaken the confidence of investors and clients. Customer outflows in the fourth quarter totaled over 110 billion Swiss francs ($120 billion).
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