March 15, 2023

SWITZERLAND: Credit Suisse's Largest Shareholder, Saudi National Bank Said On Wednesday "Absolutely" Not Another Cent For Credit Suisse. Swiss Natl Bank Going To Lose A Lot Of Money.

Credit Suisse is feeling the karma backlash. Fall from fake, propped up, phoney baloney grace. They live lavish lives and are all frauds, and modern day robber barons. Redistributing our personal wealth to all of their comrades using the financial markets and taxation. Then beg for financial help covering their asses when the shit hits the fan after they have intentionally breached their fiduciary duty to their clients and shareholders with their reckless management of their company's finances. (emphasis mine)
Reuters News
written by Rachna Uppal
Wednesday March 15, 2023

RIYADH - The head of Credit Suisse Group's largest shareholder, Saudi National Bank (SNB) (1180.SE), said on Wednesday it would not buy more shares in the Swiss bank on regulatory grounds.

"We cannot because we would go above 10%. It’s a regulatory issue," SNB chairman Ammar Al Khudairy said in an interview with Reuters. The Saudi bank holds a 9.88% stake in Credit Suisse, according to Refinitiv data.

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 (SIVB.O).

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 one that was not time-dependent. The Saudi bank would exit when proper value to the shares had been acquired, he added.

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

"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."

The Saudi lender acquired a stake of almost 10% last year after it took part in Credit Suisse's capital raising and committed to investing up to 1.5 billion Swiss francs ($1.5 billion).

Credit Suisse on Tuesday published its annual report for 2022 saying the bank had identified "material weaknesses" in controls over financial reporting and not yet stemmed customer outflows.


Bloomberg News
written by Dinesh Nair and Marion Halftermeyer
December 5, 2022

Credit Suisse Group AG shares rose on the prospect that Saudi Arabian Crown Prince Mohammed bin Salman will take a stake in the Swiss firm’s planned investment bank spin out.

Bin Salman may put about $500 million into the vehicle, according to people with knowledge of the matter. Other investors may include former Barclays Plc chief executive Bob Diamond’s Atlas Merchant Capital, the people said, asking not to be identified as the deliberations are private. It’s unclear whether the Crown Prince’s interest would come in a personal capacity or through other investment vehicles in the Kingdom.

The Saudi National Bank, 37% owned by the nation’s sovereign wealth fund, is already an anchor investor in Credit Suisse’s $4 billion ongoing capital raise. A further investment by the oil-rich nation would boost confidence in the lender’s restructuring efforts. Bank executives have already said several parties are interested to invest in the reprised Credit Suisse First Boston brand under veteran dealmaker Michael Klein.

Credit Suisse declined to comment. Saudi Arabia’s Center for International Communications didn’t immediately respond to request for comment. The Wall Street Journal earlier reported the investment interest.

The Zurich-based bank extended gains from Friday, when comments by Chairman Axel Lehmann helped break a 13-day losing streak. The stock traded up 3% at 3.03 Swiss francs at 2:17 p.m in Zurich, after earlier gaining as much as 7.5%. They’re down about 64% this year.

Credit Suisse has been eager to put to rest concerns about its financial position after more than $8 billion in losses over the past two years and some recent client defections. Any outside investors in Credit Suisse First Boston would reduce the capital the Swiss bank would have to dedicate to the unit in a years-long process of carving it out. Lehmann said last week that the bank’s liquidity situation had improved and the huge outflows of client assets earlier in the quarter had been stemmed.

Declines of the past weeks had pushed the shares near the level that the Swiss lender is pitching to investors in the capital raise, damaging the offer’s attractiveness to investors.

The First Boston business Klein is taking over will attempt to protect and restore some of the lender’s historically strongest investment banking businesses, such as in mergers and acquisitions and leveraged finance. The Swiss firm’s investment bank division was named Credit Suisse First Boston for almost two decades before it decided in 2005 to retire the name in favor of one moniker for all its businesses.

The potential investment by the Saudi Arabian leader, known as MBS, would be a further demonstration of the strength of Klein’s Middle East ties. His connections in the Kingdom have been a key part of the plans for the investment bank and the capital increase. He was directly involved in helping line up the investment by Saudi National Bank, allowing it to take a stake of as much as 9.9%, according to people with knowledge of the discussions.

Those ties stretch back at least to his Citigroup days, where Klein led negotiations during the financial crisis over a $7.5 billion capital injection from Abu Dhabi. He also oversaw the Citigroup team that helped Dow Chemical Co. get financing from Kuwait Investment Authority.

Credit Suisse announced on Monday that it had also completed the $5 billion in new debt issuance, part of plans to shore up its balance sheet, and would provide an updated funding plan for 2023 when it releases fourth quarter earnings on Feb. 9.

The new shares will begin trading on Dec. 9. Credit Suisse needs funds from the rights offering to finance job cuts and the spin out among other elements of its major overhaul.
The Financial Times
written by Owen Walker, Stephen Morris, Laura Noonan in London, and Sam Jones in Zurich
Wednesday March 15, 2023

The Swiss central bank said it would provide a liquidity backstop to Credit Suisse after the lender’s shares fell by as much as 30 per cent and sparked a broader sell-off in European and US bank stocks.

In a joint statement with financial regulator Finma on Wednesday evening, the Swiss National Bank said there were “no indications of a direct risk of contagion for Swiss institutions due to the current turmoil in the US banking market”.

Credit Suisse executives held talks with representatives from the SNB and Finma on Wednesday afternoon after the bank’s equity and bonds plunged in value following the failure of three US banks last week. The Financial Times first reported that Credit Suisse had requested a public statement of support.

“Credit Suisse meets the higher capital and liquidity requirements applicable to systemically important banks,” the SNB and Finma said. “In addition, the SNB will provide liquidity to the globally active bank if necessary.”

The steep share price decline came after the chair of the Saudi National Bank, which bought a 10 per cent stake in Credit Suisse last year, ruled out providing the Swiss lender with any more financial assistance.

The bank has been hit by a series of scandals in recent years, including the biggest trading loss in its 167-year history following the implosion of Archegos Capital and the closure of $10bn of investment funds linked to collapsed finance firm Greensill.

Credit Suisse shares closed down 24.2 per cent on Wednesday, pushing its market value below SFr7bn ($7.6bn). Shares in the bank, which raised SFr4bn of capital just a few months ago, are down 39 per cent this year and 85 per cent over the past two years.

On a call with several hundred clients on Wednesday, analysts from JPMorgan suggested that the SNB might guarantee Credit Suisse’s deposits and force it to sell its investment bank, according to people who were briefed.

However, the analysts thought the most likely scenario if Credit Suisse’s situation deteriorates is a sale of the lender to local rival UBS, one of the people said. An equity injection by the SNB is also a possibility as is allowing Credit Suisse to try to fix its own problems by selling a minority stake in its retail bank and using the proceeds to restructure the rest of the group.

However, the JPMorgan analysts said it was unlikely that Credit Suisse would be allowed to fail because of its importance to the Swiss economy and Zurich’s status as a global financial centre.

Octavio Marenzi, analyst at Opimas, said: “The [SNB] and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland’s reputation as a financial centre.”

Credit Suisse declined to comment.

Separately, the European Central Bank has asked EU lenders to disclose their exposures to the Swiss lender, a person familiar with the matter told the FT.

The ECB debated making a public statement to try and calm the waters, but as of Wednesday afternoon it had decided against doing so for fear of adding to market panic, the person added.

The US Treasury said it was “monitoring this situation and has been in touch with global counterparts”.

The slide in Credit Suisse’s shares reignited a broader sell-off in bank stocks in Europe and the US, which were already reeling this week from the failure of Silicon Valley Bank.

BNP Paribas, Sociรฉtรฉ Gรฉnรฉrale, Deutsche Bank, ING and Barclays lost between 9 and 12 per cent. In the US, JPMorgan fell 4.7 per cent and Citigroup declined 5.4 per cent.

Investors said Credit Suisse’s problems were a reminder that Europe’s banks also had large bond portfolios, the paper value of which has been hammered by rising interest rates.

“Credit Suisse is an isolated case,” said Charles-Henry Monchau, chief investment officer at Syz Bank. “But banks in Europe, because of regulatory pressure, had to load up on negative-yielding bonds at the worst time and now they are facing major unrealised losses.”

Asked on Bloomberg TV whether Saudi National Bank would be open to providing capital to Credit Suisse if there was a call for additional equity, SNB chair Ammar Alkhudairy said: “The answer is absolutely not.”

He said owning more than 10 per cent of Credit Suisse would result in unwanted regulatory requirements, though he added he supported the bank’s restructuring plan and did not think it needed more capital.

Credit Suisse revealed on Tuesday that its auditor, PwC, had identified “material weaknesses” in its financial reporting controls. That led to the delay of the publication of its annual report last week after the US Securities and Exchange Commission asked for more clarity on the flaws.

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