Credit Suisse Shares Sink As Saudi Investor Caps Fund Pipeline
Shares of Credit Suisse crashed more than 22% Wednesday to a new record low after its biggest backer appeared to rule out providing any more funding for the embattled Swiss lender, Mark Thompson and Anna Cooban reported for CNN Business.
Photo Insert: Once a big player on Wall Street, Credit Suisse has been hit by a series of missteps and compliance failures over the past few years that have damaged its reputation, cut its profits, and cost top executives their jobs.
In an interview with Bloomberg, the chairman of the Saudi National Bank (SNB) said it would not increase its stake in Credit Suisse.
“The answer is absolutely not, for many reasons. I’ll cite the simplest reason, which is regulatory and statutory. We now own 9.8% of the bank — if we go above 10% all kinds of new rules kick in, whether be it by our regulator or the European regulator or the Swiss regulator,” Ammar Al Khudairy told Bloomberg.
“We’re not inclined to get into a new regulatory regime.” He made similar comments to Reuters at the sidelines of a conference in Saudi Arabia.
Once a big player on Wall Street, Credit Suisse has been hit by a series of missteps and compliance failures over the past few years that have damaged its reputation, cut its profits, and cost top executives their jobs.
In October, it embarked on a “radical” restructuring plan that cut 9,000 full-time jobs, spun off its investment bank and focused on wealth management.
SNB — which describes itself as the kingdom’s biggest bank — committed $1.5 billion of the $4 billion in new capital Credit Suisse raised to fund its overhaul. Al Khudairy said that he was pleased with the restructuring, adding that he didn’t think the Swiss lender would need extra money.
“We are happy with the plan, the transformation plan that they have put forward. It is a very strong bank,” Al Khudairy said in the Reuters interview.
“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,” Al Khudairy said.