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Credit Suisse hits new low as fears mount: Bank on track for worst year ever as equities fall another 3.6%
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Shares in Credit Suisse crashed to a record low yesterday amid renewed fears for the future, sending the stock into its worst year ever.
The beleaguered lender plummeted another 3.6 percent to 2.9 Swiss francs as investors sold shares ahead of the next phase of its mammoth fundraising effort.
The stock is now down more than 65 percent in 2022, heading into its worst year ever.
Scandal-prone: Credit Suisse fell another 3.6% to 2.9 Swiss francs as investors sold shares ahead of the next phase of its mammoth fundraising
The latest slump suggests that the bank’s backers fear CEO Ulrich Korner’s bailout may fail.
After a series of scandals, Credit Suisse has been trying to raise £3.5bn from investors to turn its fortunes around.
The first piece, backed by Saudi Arabia’s largest bank, has been completed. But it will go to existing shareholders and hopes to raise a further £1.9bn by December 8.
Investors are entitled to purchase two new shares, at Swiss francs 2.52 each, for every seven they own.
But those rights were sold yesterday in a sign that investors were reluctant to put in more money.
Russ Mould, director of investment at AJ Bell, said: “In an environment like the one we have today, with a crisis in the cost of living and a downturn in deal closing, it doesn’t take much for an accident prone company to become a to have an accident. .’
Credit Suisse has been bruised by misfortunes, including a spying scandal among top executives, the collapse of lender Greensill Capital and hedge fund Archegos, and then-chairman Antonio Horta-Osorio’s breach of Covid rules.
Tidjane Thiam, who stepped down as CEO in the wake of the 2020 espionage scandal, said at the Financial Times Banking Summit: “I was extremely tough and I’m quite proud none of that happened under my supervision.”
Credit Suisse’s shareholder offering is guaranteed by a group of banks, which will eventually buy the remaining stock if it goes unrecognized.
When they eventually try to sell the shares later, it could put more pressure on the bank’s share price.
Between the end of September and November 11, customers have withdrawn £74 billion.
It has warned it was on track to make a £1.3bn loss in the fourth quarter, putting it £3bn in the red for the full year. It plans to cut costs by 15 percent and cut 9,000 of its 52,000 employees over the next three years, with 2,700 in 2022.
It also plans to slim down its beleaguered investment bank.