Banking & Finance Credit Suisse intends to borrow up to $54bn to boost liquidity By Reuters March 16, 2023 Reuters/Eduardo Munoz Saudi National Bank acquired almost a 10 percent stake in the troubled Swiss bank last year for SAR5.5 billion Credit Suisse Group AG said on Thursday it intended to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank in what it called “decisive action” to boost its liquidity. Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unprecedented move by a central bank after the flagship Swiss lender’s shares fell by as much as 30 percent on Wednesday. “Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralised by high quality assets,” Credit Suisse said in a statement. It pointed to its end-2022 Common Equity Tier 1 capital ratio of 14.1 percent and average liquidity coverage ratio of 144 percent. The latter had improved to about 150 percent by March 14, it said. Referring to the intended borrowing, it said: “This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs.” The collapses in the US of Silicon Valley Bank last week and Signature Bank two days later have sent global bank stocks on a rollercoaster ride. Gary Ng, senior economist at Natixis Corporate and Investment Bank, said investors might be worried about Silicon Valley Bank and Credit Suisse for different reasons, but both suffered from the side effect of high-interest rates. “The underlying economic stress may emerge more frequently … and it is possible to see more black swans in an uncertain environment,” he said. The Swiss lender’s CEO Ulrich Körner said in an interview earlier on Wednesday that the bank’s “capital, our liquidity basis is very very strong”: “We fulfill and overshoot basically all regulatory requirements.” Credit Suisse Group last month reported its biggest annual loss since the 2008 global financial crisis after rattled clients pulled billions of dollars from the bank. It warned that a further “substantial” loss would come this year. The bank, Switzerland’s second biggest, has begun a major overhaul of its business, cutting costs and jobs to revive its fortunes, including creating a separate business for its investment bank under the CS First Boston brand. The bank raised four billion Swiss francs from investors in December. On Wednesday, it also announced offers for senior debt securities for cash of up to three billion francs. The bank said it had also accelerated cost-cutting measures and was well on track to deliver 2.5 billion francs of cost-base reductions by 2025, including 1.2 billion francs in 2023.