ZURICH (AFP) – Credit Suisse shares tumbled to a historic low on Friday, after the second-biggest lender in Switzerland announced details of a bid to raise capital amid concerns over customers withdrawing funds.
The embattled bank has been shaken by a series of scandals and last month launched a radical overhaul aimed at turning around its fortunes.
The lender’s stocks fell around 6.56 per cent by the close of trading to reach CHF3.318 per share.
Since the start of the year, the Zurich-based bank’s shares have lost 60 per cent of their value and more than 73 per cent since the bankruptcy of British financial firm Greensill in March 2021.
On Thursday, after the Swiss stock exchange closed, the bank unveiled the details of its rights issue to raise around CHF4 billion (USD4.2 billion).
The Saudi National Bank has agreed to take a 9.9 per cent stake in the two-part capital increase, which will raise CHF4 billion for Credit Suisse to finance its restructuring projects.
But the bank’s stocks tumbled on Wednesday before an extraordinary general meeting as the lender issued another profit warning, predicting a fourth-quarter pre-tax loss of up to USD1.6 billion.
Credit Suisse has already suffered losses in the previous three quarters.
But investors were worried in particular about the outflows, including in its wealth management division, one of the areas that it has said it seeks to refocus its efforts.
Analyst at Swiss investment managers Vontobel Andreas Venditti said “we were stunned” by the “massive” withdrawals of capital.