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| Credit Suisse shares nosedived to historic lows Wednesday after its main shareholder said it would not invest any more money, as market jitters over European lenders spiralled in on the Swiss bank. Switzerland's second-biggest bank, hit by a series of scandals in recent years, saw its share price tumble off a cliff after Saudi National Bank chairman Ammar Al Khudairy said it would "absolutely not" up its stake. |
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Originally Posted by DigitalOne
(Post 5513185)
Credit Suisse Shares Plunge 30% Till quite recently, they were giving gyaan on why they wouldn't buy bonds of a beleaguered Indian conglomerate. |
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Originally Posted by DigitalOne
(Post 5513185)
Till quite recently, they were giving gyaan on why they wouldn't buy bonds of a beleaguered Indian conglomerate. |
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Originally Posted by DigitalOne
(Post 5513185)
Credit Suisse Shares Plunge 30% Till quite recently, they were giving gyaan on why they wouldn't buy bonds of a beleaguered Indian conglomerate. |
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Originally Posted by vamsi.kona
(Post 5513197)
I don't think Credit Suisse shares falling by 30%, while a fact, correctly showcases the overall scenario. Along with that, one should also mention that this bank, which was and is still considered as one of the top banks globally, has been on a decline since 2007. I don't know how such a big institution continued with such poor stock performance for almost 15 years. |
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Originally Posted by DigitalOne
(Post 5513185)
Credit Suisse Shares Plunge 30% |
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Originally Posted by pandey.jai
(Post 5515029)
UBS rumored to be (forced into) buying CS. The offer is rumored to be 0.25 francs where the CS stock ended Friday at 1.85 francs. UBS will essentially end up holding the bad debt. Swiss authorities in trying to bailout CS might just mess up both UBS and CS. Hopefully this is where it all ends and the contagion doesn’t spread. |
| The Swiss government, central bank and regulator FINMA concluded that a UBS takeover was better than letting Credit Suisse fail, which could have sparked a wider banking-sector panic. The job for Kelleher was how to avoid infecting UBS with its arch-rival’s problems. He’s secured some handy protections. The all-share offer values Credit Suisse at 60% less than its closing share price on Friday, and at a fraction of its 45 billion Swiss franc book value at the end of last year. FINMA will also let UBS write off its target’s debt instruments, known as Additional Tier 1 (AT1) securities, boosting the combined group’s equity capital by about 16 billion Swiss francs. Meanwhile the government will cover up to 9 billion Swiss francs of losses, such as markdowns on Credit Suisse assets, past a certain threshold. Thanks to a competition waiver, Kelleher can even keep Credit Suisse’s domestic unit, giving UBS a dominant position in local retail and corporate banking and allowing it to extract hefty cost savings. Chief Executive Ralph Hamers reckons the bank can cut about $8 billion of annual expenses by 2027. After deducting tax at 24% and capitalising using a 10% discount rate, those savings have a net present value of about $60 billion - roughly in line with UBS’s market value before the deal. |
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Originally Posted by varunswnt
(Post 5515344)
It is now too much of UBS concern rather than Swiss authorities (putting all their eggs in single basket), even putting more risk and concentrating on only 1 stakeholder. With this, I believe Swiss banking will definitely take a long term hit with investors confidence. |
| The Swiss Bank Employees Association, in a statement to Reuters, demanded that UBS keep job cuts to an "absolute minimum". "The jobs of very many employees are at stake," it said, adding that it was in touch with management. The statement underscores the sense of unease in Switzerland, with its reputation as a global financial center on the line. |
| Green Party lawmaker Gerhard Andrey said that Credit Suisse is "such a visible institute". "This puts us in a very difficult situation as a country," he said. Some expressed concerns about the dominant position of UBS. |
| Swiss media was also shocked by the developments. "A zombie is gone but a monster is born," read the title of a commentary in the Neue Zuercher Zeitung, often seen as the voice of the establishment. "A few months ago, nobody would have thought that Credit Suisse would fail. However it is not an accident," the newspaper wrote in the piece accusing the bank of arrogance and pride. |
| The Tages-Anzeiger newspaper described the affair as a "historic scandal". "The federal government, the financial supervisory authority and the national bank let themselves be ripped off by UBS," the paper wrote. "The new mega bank has the advantages - taxpayers, customers, and employees have the disadvantages," the paper added in an editorial, warning of brutal job cuts ahead. |
| Gulf investors old and new are hurting. Saudi National Bank's investment was stunning in its brevity: the lender lost 1.1 billion francs less than 15 weeks from when it finished buying its stake in Credit Suisse's latest capital raise. The firm thought it was buying at a bargain when it became the Swiss bank's largest shareholder just a few months ago. Saudi National Bank's chairman helped fuel the panic this week when he ruled out raising its stake in Credit Suisse. |
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Originally Posted by Turbanator
(Post 5515904)
I don't know why these guys announced so much in public. They could have held talks privately for a higher control or maybe their talks failed but they will be the biggest losers in addition to other shares and bondholders. |
| Switzerland’s tab for shoring up its reputation as a financial center could run to 12,500 Swiss francs ($13,500) for every man, woman and child in the country. |
| The chairman of top Credit Suisse (CSGN.S) shareholder Saudi National Bank (SNB) (1180.SE) has stepped down less than two weeks after making comments blamed for contributing to the Swiss lender's demise. |
| All times are GMT +5.5. The time now is 10:58. |