has lost more than 70% but the fault lies with its managers, not with SVB

Concern has risen in global banking stocks, initially due to the collapse of California’s Silicon Valley Bank (SVB). But now Doubts about stability fall on Credit Suisse.

Credit Suisse’s share price fell by more than 30% on Wednesday to a record low of around 1.56 Swiss francs per sharecame after its main shareholder, the Saudi National Bank, ruled out providing new financing due to regulations limiting its participation.

Although the Saudi president said that Credit Suisse was a solid bank and was unlikely to need more cash, his comments on the funding cap worried investors.

Fears about possible weaknesses in the global banking sector have deepened and concerns over continued problems at the Swiss lender have grown. Credit Suisse is much larger than SVB and is considered systemically important to the global financial system..

Yesterday, the Swiss National Bank got involved in the situation. Credit Suisse communicated its intention to apply for the SNB Covered Loan Facility, as well as a short-term liquidity facility that would total approximately 50 billion Swiss francs. This additional liquidity injection would be intended to support Credit Suisse’s core businesses and clients. After the announcement, the shares rallied and, yesterday, the shares rose 19.15% to 2.02 Swiss francs.

A path marked by setbacks

The Swiss bank has been embroiled in several scandals in recent years. Some of the most notorious are the following for poor management:

espionage scandal: In 2019, it was discovered that Credit Suisse had hired private detectives to spy on a company executive who had been hired by its competitor, UBS. The bank fired two senior executives and apologized for their behavior.

Archegos Cheat: In March 2021, Credit Suisse suffered multi-billion dollar losses due to its exposure to the Archegos Capital Management investment fund. The bank was unable to quickly sell Archegos shares when their value began to fall, resulting in losses of more than $4.7 billion.

Greensill scandal: In April 2021, Credit Suisse suspended investment funds that had invested in loans from finance company Greensill Capital, which later filed for bankruptcy. The funds were valued at $10 billion and many investors suffered significant losses.

Money laundering: In September 2021, the bank admitted to breaching money laundering regulations in connection with its securities brokerage services and changed its management leadership.

As a result, Credit Suisse has faced multiple scandals in recent years that have affected its reputation and resulted in significant losses for its clients and investors who have weighed down the confidence of the bank.

A sunk price

In all this time the price of the value has evolved from the doldrums…

Credit Suisse’s share price has experienced ups and downs in recent years. In the period from 2018 to 2019, the Credit Suisse stock had a downward trend, priced around CHF 11-12 per share in May 2018, and falling to a low of around CHF 8 per share. share in December 2018. From there, the stock began to recover, reaching a peak in July 2019 of around 14 Swiss francs per share.

In 2020, Credit Suisse’s share price was negatively affected by the COVID-19 pandemic and global economic uncertainty. In March 2020, the stock fell to a low of around 6 Swiss francs. per share, before gradually recovering in the following months. In October 2020, the stock peaked at around CHF 11 per share before falling back to around CHF 9 per share in December 2020.

In the first half of 2021, Credit Suisse’s price was relatively stable at around 10 Swiss francs per share, but suffered a sharp decline in late June and early July 2021 due to the problems of the Archegos hedge fund. Capital Management, which had a large exposure in the bank. In July 2021, Credit Suisse stock fell to a low of around 7 Swiss francs per share before gradually recovering in the following months.

And in 2022 it got worse. Despite the environment of rising interest rates that tends to favor the banking business, the shares of the Swiss bank sank almost 70% going from 9 Swiss francs to 3 Swiss francs.

The reasons for such a collapse come because it reported, at the end of the year 2022, a net loss of 7,293 million Swiss francs (equivalent to 7,381 million euros)which represents an increase of more than four times compared to the red numbers of 1,650 million francs (equivalent to 1,670 million euros) registered the previous year. This result represents the worst financial performance of the Swiss bank since the financial crisis of 2008..