Credit Suisse to borrow up to $54bn amid global bank crisis fears

Switzerland based global investment bank Credit Suisse will borrow up to 50 billion Swiss francs ($54bn) from Swiss National Bank (SNB) to shore up confidence in the troubled lender amid concerns about the health of the global banking system after the collapse of Silicon Valley Bank (SVB).

Credit Suisse said on Thursday the loan from  Switzerland’s central bank would support the bank’s core businesses as it took the “necessary steps to create a simpler and more focused bank built around client needs”.

The Zurich-based lender said it would also buy back about $3bn of its debt. The announcement comes after Credit Suisse shares lost more than one-quarter of their value amid persistent market jitters in the wake of SVB’s collapse, the biggest bank failure in the United States since 2008.

In a statement on Thursday, Credit Suisse Chief Executive Ulrich Körner said the measures “demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders”.

“We thank the SNB and FINMA [Swiss Financial Market Supervisory Authority] as we execute our strategic transformation,” Körner said. “My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”

The SNB and FINMA had earlier on Wednesday said they stood ready to make liquidity available to Credit Suisse if needed, although the bank’s capital and liquidity levels met regulatory requirements.

Credit Suisse’s tumbling share price came after Saudi National Bank, Credit Suisse’s biggest shareholder, said in a television interview on Wednesday that the lender would “absolutely not” increase its stake in the Swiss bank.

Credit Suisse’s woes have added to a rout in bank shares in the US, Europe and Asia, sparked by the implosion of SVB and subsequent failures of cryptocurrency-focused lenders Signature Bank and Silvergate Capital.

Credit Suisse’s announcement on Thursday is the latest effort to restore the bank’s tarnished image following a raft of scandals in recent years, including the hiring of private detectives to spy on employees and facilitating corrupt loans in Mozambique.

In October, Credit Suisse’s stock price hit a record low after a memo from Körner, which sought to assure employees about the bank’s future, inadvertently sparked rumours the lender could be on the brink of collapse.