Credit Suisse, Switzerland’s second-largest bank, plunged 21% just before noon (local time) on the European stock market on the 15th.
The stock price fell to $2.19 to its lowest level since the 1980s, and trading was suspended several times amid a surge in trading volume, Reuters reported.
Credit Suisse plunge is not related to the risk of bank runs caused by a sharp drop in the value of bond assets after a rate hike, which is raising concerns about the bankruptcy of local banks in the U.S., but shares the problem of a decline in investor confidence in the banking industry as a whole.
Credit Suisse, which has fallen for six consecutive days until the previous day, unfolded when Saudi Arabia’s president of the state-run bank (SNB), who became the largest shareholder with 9.9% purchase last year, suddenly notified that additional investment is impossible due to regulations. The Saudi state-run bank mentioned an additional $1.5 billion investment in Credit Suisse last year.
The bank has been in the news for years due to various financial scandals, and in its annual report on the same day, it admitted that the capital situation is good but that it has “significant weakness” in managing financial reports on its own. He also said that customers are continuing to leave. In the fourth quarter of last year alone, $12 billion of customer assets were withdrawn.
Meanwhile, there is no sign of a sharp turnaround for the banking sector as a whole and local banking stocks in the pre-opening trading of Wall Street, which rebounded the previous day after a sharp drop on the 3rd. Until the rebound the previous day, $460 billion in bank stock capitalization worldwide, including $200 billion in the U.S., disappeared.
European banking shares, which had been on the decline since mid-week when U.S. bank stocks were withdrawn, are also being watched as large banks such as UBS in Switzerland, Deutsche Bank in Germany, and Societe Generale in France, falling 6-10%.
As a result, the overall stock price of the stock market fell, and the UK’s FTSE100 index fell 2.5% to its lowest level in three months.