Banking Crisis: Credit Suisse Held Meetings Last Weekend On Scenarios For Bank – Sources

Summary

• Meetings to involve teams reporting to CFO – sources
• Scenarios may change Credit Suisse’s future
• Seeks $54 billion loan from the central bank

Credit Suisse AG (CSGN.S) will hold internal talks over the weekend to assess scenarios for the bank as it grapples to regain the market’s confidence, people familiar with the matter told Reuters on Friday.

The meetings will involve teams reporting to Chief Financial Officer Dixit Joshi, the people said. Executives will go over the numbers and map out scenarios that might change Credit Suisse’s future, the sources added.

On Thursday, the bank said it would request a $54 billion loan from the Swiss National Bank after its customers drew out more than $100 billion in funds in recent months and its shares tumbled 25% on Wednesday.

The emergency lifeline has provided the beleaguered lender with some relief but its shares continued their descent on Friday. With investor confidence still shaky, some analysts have said the loan facility has only bought Credit Suisse time to plan what to do next strategically to rebuild profitability.

Among probable scenarios, analysts, investors, and bankers speculate that Credit Suisse could divest or wind down some of its existing businesses with a break-up potentially on the cards.

A more decisive solution could be a complete takeover by a rival.

A series of scandals over many years, multi-billion dollar losses, top management changes, and a dull turnaround strategy can be attributed to the troubles that the 167-year-old Swiss lender finds itself in.

The sell-off in Credit Suisse’s shares started in 2021, sparked by losses linked to the collapse of investment fund Archegos and Greensill Capital.

In July, new CEO and restructuring expert Ulrich Koerner launched a strategic review that failed to impress investors.

An uncorroborated rumour on a looming failure of the bank in the autumn sent customers fleeing.

Credit Suisse confirmed in February that clients had drawn out 110 billion Swiss francs of funds in the December quarter while the bank took its largest annual loss of 7.29 billion Swiss francs since the financial crisis. In December, Credit Suisse tapped investors for 4 billion Swiss francs.

On Wednesday, Saudi National Bank (1180.SE), the bank’s top backer, told reporters it could not give more funds to the bank as it was constrained by regulatory snags, though it was in support of the bank’s turnaround plan.