Credit Suisse woes deepen as shares dive

Shares in Credit Suisse plunged to a new low on Monday as the scandal-plagued Swiss banking giant seeks to ease concerns about its financial health.

The bank’s stock price dropped by almost 10 percent to 3.58 Swiss francs ($3.61) at the start of trading before clawing back some losses. It was worth 3.65 francs by midday, down more than eight percent.

The Financial Times reported that senior executives sought over the weekend to reassure big clients and investors about the bank’s liquidity and capital position due to concerns raised about its financial strength.

Credit Suisse chief executive Ulrich Koerner sent an internal message to staff on Friday to ease their own concerns, saying there were “many factually inaccurate statements being made” about the bank.

“I trust that you are not confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank,” Koerner said.

Koerner took over as Credit Suisse’s chief executive at the start of August with the mammoth task of revitalising it.

He is due to present “transformation plans” on October 27.

The bank was rocked by the collapse of the British financial firm Greensill, in which some $10 billion had been committed through four funds, and then by the implosion of the US fund Archegos, which cost it more than $5 billion.

In October, it was also fined $475 million by the US and British authorities for its loans to state-owned companies in Mozambique.

The bank’s shares have lost 70 percent of their value since March 2021.

In his message to staff, Koerner noted that he had spoken last week at a wealth management forum which was themed “Rising like a Phoenix”.

“It is an apt metaphor for what we want to accomplish. As I told our colleagues, we are in the process of reshaping Credit Suisse for a long-term, sustainable future — with significant potential for value creation,” he wrote.

Agence France-Presse