Credit Suisse has reportedly asked the Swiss National Bank and regulator Finma for public reassurance concerning its financial health as shares dropped as much as 30%. Credit Suisse also sought the recall of the SNB’s Ammar Alkhudairy, who had bought a 10% stake in the bank last year, but the purchase may now fall foul of additional regulatory obligations. The SNB has refused to provide Credit Suisse with any further financial assistance. The ECB has also asked for disclosures on Swiss exposure from EU lenders. Credit Suisse’s market capitalisation now falls below CHF7bn, despite having raised CHF4bn capital at the close of 2015. The shares are currently trading about 17% lower.
The slump comes after SVB’s recent collapse and amid rumours of additional negative fall out related to bond portfolios amid rising interest rates. Charles-Henry Monchau, chief investment officer at Syz Bank, said the banks held an excessive amount of negative-yielding bonds and were now facing major unrealised losses on the balance sheet. Meanwhile, investors are betting upon interest rate cuts from the US Federal Reserve later in 2016 that will likely lead to bond markets rallying.
The bank has revealed a “material weakness” in its financial reporting controls which led to the delay of the publication of its annual results last week after the US Securities and Exchange Commission had concerns over flaws. Credit Suisse chairman Axel Lehmann reassured customers that financial assistance from the Swiss government was not a consideration. At present it is not clear whether either regulator will intervene publicly in support of Credit Suisse given the crisis of confidence it appears to be experiencing.