Shares of Credit Suisse jumped on Thursday after the Swiss National Bank announced it would lend the ailing bank $54 billion. Photo by Michael Buholzer/EPA-EFE
March 16 (UPI) -- Shares of European financial services giant Credit Suisse jumped 30% when markets opened on Thursday on the news that the bank will borrow $54 billion from the Swiss National Bank.
The financial institution's rally slowed some by mid-morning but it still remained up more than 21%. The move was a solid contrast from Wednesday when the stock stumbled down about 20% on the heels of Saudi National Bank saying it would not increase its support of the Swiss lending leader.
The news from the Saudis, Credit Suisse's largest investor, prompted Switzerland's central bank to step in, saying the bank "meets the capital and liquidity requirements imposed on systematically important banks."
Credit Suisse said in a statement that it would exercise its option to borrow $54 billion from the Swiss National Bank and accept the central bank's offer to buy back about $2.5 billion worth of debt related to 10 U.S. dollar denominated senior debt securities.
"This additional liquidity would support Credit Suisse's core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs," the bank said in a statement.
Credit Suisse's roller coaster ride started Tuesday when the bank released its 2022 annual report, which described a "material weakness" in its financial reporting that could result in "misstatements of account balances or disclosures."
CEO Ulrich Koerner said the infusion by the Swiss National Bank assures Credit Suisse of continued stability.
"These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders," Koerner said in a statement.
"We thank the SNB and FINMA [Swiss Financial Market Supervisory Authority] as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs."