Australian (ASX) Stock Market Forum

Credit Suisse collapse rumours

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waterbottle said:
They've extended 600 billion to the entire industry.
And they've let the banks borrow against the original value of their assets despite the current value being well below market.

It's a circus
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Where's the ringmaster and clowns riding trick ponies?
 
tech/a said:
From a chart perspective its one of the weakest I've seen in a while.
Nothing positive on this chart other than it's still trading.
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It's really one of the few companies where the iffyness of the chart reflects the iffyness of the company.

The whole sector is iffy in my opinion.
 
finance.yahoo.com

Credit Suisse stock slump triggers close monitoring by regulators

Credit Suisse shares slumped by as much as 30% on Wednesday after its largest shareholder said it could not provide further support, prompting the Swiss bank's CEO to make new assurances on its financial strength. Saudi National Bank (SNB), which holds 9.88% of Credit Suisse, said it would not...
finance.yahoo.com finance.yahoo.com

Saudis not willing to provide additional funding. Share price at new low, down 22% pre market **** me
 
waterbottle said:
finance.yahoo.com

Credit Suisse stock slump triggers close monitoring by regulators

Credit Suisse shares slumped by as much as 30% on Wednesday after its largest shareholder said it could not provide further support, prompting the Swiss bank's CEO to make new assurances on its financial strength. Saudi National Bank (SNB), which holds 9.88% of Credit Suisse, said it would not...
finance.yahoo.com finance.yahoo.com

Saudis not willing to provide additional funding. Share price at new low, down 22% pre market **** me
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Crickey if the Saudi Royal family aren't prepared to kick a bit of their oil money then this lot are looking pretty sick.
 
farmerge said:
Any advance on a quid for Credid Suisse!!!!
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who is going to accept their dark hole of obligations

might be smarter to wait for the liquidator and cherry-pick the assets , will be watching Barclays in case they try for a UK or EU subsidiary
 
greggles said:
Rumours that Credit Suisse is on the verge of collapse are doing the rounds of the mainstream media at the moment and the company is remaining tight lipped which is only giving more creedence to the rumours in the eyes of many observers. Credit Suisse saw a sharp rise in the spreads on its credit default swaps on Friday sparking speculation that the Swiss bank was in serious financial trouble.

It's predictable that the media is calling this Lehmann Brothers 2, but it does seem as though things are hanging by a thread at the moment and the collapse of a major European bank could be the spark that causes a plunge on global markets.

The Deutsche Bank share price is looking just as bad as Credit Suisse at the moment, and both are tanking worse than they did in 2009.



With the UK economy on a knife's edge, endless rate rises stifling economic growth and an ever-deepening war in Ukraine that continues to seem more and more like a quagmire every day, are the cracks finally starting to appear in the global economy?
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I wonder if Deutsche is in the same situation?
 
A considered opinion on CS is that
unlike Lehman and SVB, "Credit Suisse has substantial liquid assets to call upon and access to central bank lending facilities and is less sensitive than many rivals to sharp moves in interest rates. It has rebuilt its cushion against more deposit withdrawals since the worst wave of outflows in October.

It also has enough money-like liquid assets to pay back half of all its liabilities in deposits and loans from other banks, according to Bloomberg Opinion banking columnist Paul J. Davies. Koerner said the firm’s liquidity coverage ratio showed it can handle over a month of heavy outflows in a period of stress".

... but happens in a month's time?
 
Dona Ferentes said:
A considered opinion on CS is that
unlike Lehman and SVB, "Credit Suisse has substantial liquid assets to call upon and access to central bank lending facilities and is less sensitive than many rivals to sharp moves in interest rates. It has rebuilt its cushion against more deposit withdrawals since the worst wave of outflows in October.

It also has enough money-like liquid assets to pay back half of all its liabilities in deposits and loans from other banks, according to Bloomberg Opinion banking columnist Paul J. Davies. Koerner said the firm’s liquidity coverage ratio showed it can handle over a month of heavy outflows in a period of stress".

... but happens in a month's time?
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It's not a month from now, it's a month of heavy deposit outflows after they start.

I think we are probably on the tail end of outflows not the beginning but *shrug*...

Anyway, what happens after a month of heavy deposit outflows? They need to firesale sell some assets. It's mostly Swiss mortgages I think, with pretty low LTV, pretty sure they could find a buyer at good prices if they had to, or SNB can just open a repo facility for them.
 
It's always the banks.

Financial crisis spreads to Europe, but our banks are among safest in the world

If the markets are right then Europe has a far more serious banking problem than the US and it threatens world economies.
Global banks are interconnected, particularly via derivatives, so any European crisis impacts banks and the banking system around the world.

The European crisis centres around Credit Suisse – its shares fell 30 per cent at one point last night before closing down 24 per cent.

That triggered big falls in other European banks, a slump in the oil price and lower metal prices apart from gold, which surged.

US bond yields slumped as many fled to so-called safety.

Naturally Wall Street also slumped but, recovered much of the ground in late trading.

Such a widespread global crisis inevitably impacts interest rates and makes the fight against inflation much harder because it removes harsh medicine from the table.

The banking turmoil is starting scare not just the markets.

Google searches for “why banks fail” are up 90 per cent and “is my money safe” searches are up 43 per cent.

In the US people are splitting their deposits between banks limiting each deposit to the $250,000 insured limited.

In Europe the level of population scare is set to explode which will put, pressure on bank liquidity.

Australians will also ask the same questions.

For what it’s worth I believe our banks are among the safest in the world.

The left bemoans our high bank profitability but, along with their spread of borrowers, it makes our banks very safe.

But their high share prices are vulnerable to a fall in a world that has become scared of banks.

The likelihood of the world encountering a slower growth high inflation period is now much more likely as a result of the European markets prediction of a looming crisis.

But in the early morning of March 16, Australian time, the carnage in European market created a fear that we were looking at something far more serious than an event that simply influences inflation and interest rates – a European bank crisis that can’t be contained to Europe.

In Ukraine the European problems are a big danger because the western world may not be able to afford the money to fight Russia if the crisis deepens.

At this stage all the players are in denial but there is clearly something seriously wrong at Credit Suisse which has been plagued by disasters in recent times.

Many commentators are linking the Credit Suisse market fall to the collapse of the US Silicon Valley Bank.

The regional US bank might have been the trigger but, with hindsight, the Credit Suisse crisis harks back to its strategies in the previous decade to develop a global bank that would rank with the big American banks.

It simply did not have the management ability to match the Americans and took risks that cost the bank billions and weakened its structures.

The latest round of crises started to emerge late in 2022 then when there were rumblings that they were problems in the Indian Adani empire where Credit Suisse was deeply involved.

In the final quarter of 2022 there was a sudden rise in deposit withdrawals from Credit Suisse as rumours of trouble spread.

Late in January the Swiss investment bank stopped accepting notes of key Adani companies as collateral for margin loans to its private banking clients. At the time the emphasis was placed on the reported problems of Adani but clearly there were implications for Credit Suisse

Then on Tuesday this week Credit Suisse shocked the market with an announcement that it had found “material weaknesses ” in its financial reporting processes for 2022 and 2021.

The scary revelation was disclosed in the Swiss bank’s annual report which had previously been scheduled to be released in the previous week but was delayed by a call from the US Securities and Exchange Commission that was actually related to a “technical assessment” of previously disclosed revisions to consolidated cash flow in the years ended December 2020 and 2019 – prior to the company’s revelation of problems in 2021 and 2022.

Rightly or wrongly, the market fears these announcements an iceberg tip of much deeper problems.

Credit Suisse’s largest investor is Saudi National Bank was clearly shocked by the revelations.

The Saudi Bank had taken a 9.9 per cent stake in Credit Suisse last year as part of the Swiss lenders $US4.2bn ($6.3bn) capital raising to fund a massive strategic overhaul aimed at improving its investment banking performance and addressing its many risk and compliance failures.

The Saudi Bank stated that it could not provide the Swiss bank with any further financial assistance blaming Saudi regulations which limited its stake to 10 per cent.

Having burned one saviour it will be very hard for Credit Suisse to find another because no one knows how deep its problems are.

Meanwhile, Swiss regulators exploring options to stabilise Credit Suisse. The company is still in denial, but few believe them.

The world will be hoping the markets are wrong about Credit Suisse and that its problems can be managed by the Swiss government.

It’s rare for markets to be wrong when a share price falls 30 per cent in one day.

ROBERT GOTTLIEBSEN BUSINESS COLUMNIST
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