The firm’s Chairman Axel Lehmann declined to comment on whether it will need assistance from the government in the future, he highlighted that the bank has no problems as it has good return capital ratios.
With the banking industry in the United States currently experiencing financial strain, there may be a trickle-down to Europe where eyes are now fixed on banks like Credit Suisse Group AG (SWX: CSGN). The bank’s shares are witnessing a massive freefall at the moment, sliding below 27% in what comes off as the second day of losses.
The woes of the bank started when it recorded a major default in its accounting process as flagged by the United States Securities and Exchange Commission (SEC). The call from the regulator was notably related to a “technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”
The conversations with the SEC led to the delay of the bank’s annual report which was originally scheduled for last week Thursday and was released on Tuesday. Late last year, Credit Suisse said it was seeing “significantly higher withdrawals of cash deposits, non-renewal of maturing time deposits, and net asset outflows at levels that substantially exceeded the rates incurred in the third quarter of 2022.”
This trend might be sustained if the right precautions are not put in place. The financial landscape, especially for firms operating in the United States is a very volatile one at the moment. The collapse of Silicon Valley Bank (SVB) has put investors and bank users on a high alert and at every sign of frailty in a particular financial services provider, the chances of dissociating itself are very high.
Credit Suisse has been battling bouts of scandals, legacy risk, and a host of compliance failures that have notably dragged it back when compared to its peers over the years. With the current outlook, more turmoil might be in the works for the bank.
Credit Suisse Funding from Saudi Partner to Be Halted
As revealed recently, the woes of Credit Suisse are bound to be compounded as its major financier, the Saudi National Bank (SNB) has said it will stop funding the company. SNB took a 9.9% stake in Credit Suisse last year and has been a major backbone for the firm since then.
“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters earlier today. However, he added that the SNB is happy with Credit Suisse’s transformation plan and suggested the bank was unlikely to need extra money.
Credit Suisse is currently at a tipping point and though the firm’s Chairman Axel Lehmann declined to comment on whether it will need assistance from the government in the future, he highlighted that the bank has no problems as it has good return capital ratios.
“We are regulated, we have strong capital ratios, very strong balance sheet. We are all hands on deck,” he said in a statement to CNBC’s Hadley Gamble during a panel session in Riyadh today.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Subscribe to our telegram channel.
#Credit #Suisse #Line #Turmoil #Major #Backer #Halts #Funding