Mar 15, 2023
Credit Suisse Chair Says State Assistance ‘Not a Topic’ for Bank
(Bloomberg) -- Credit Suisse Group AG Chairman Axel Lehmann said government assistance “isn’t a topic” for the lender as the Swiss bank seeks to shore up confidence among clients, investors and regulators after a series of missteps.
Speaking at the Financial Sector Conference in Saudi Arabia on Wednesday, Lehmann said it wouldn’t be accurate to compare Credit Suisse’s current problems with the recent collapse of Silicon Valley Bank, particularly because the banks are regulated differently.
“We have strong capital ratios, a strong balance sheet,” Lehmann said. “We already took the medicine,” he said, referring to the extensive restructuring program announced in October.
Lehmann’s comments echo remarks by Chief Executive Officer Ulrich Koerner on Tuesday, who pledged for patience with the lender as it embarks on the three-year plan to return the bank to profitability. The process is now at risk of becoming bogged down in a broader financial-sector selloff following the collapse of several regional US lenders, which prompted authorities there to introduce a new backstop big enough to protect the entire nation’s deposits.
Read more: Credit Suisse CEO Urges Patience as Bank Sees Recent Inflows
Credit Suisse fell 1.6% at 9:41 a.m. in Zurich trading. The stock has lost about 18% of its value over the past week amid broader concerns about banks’ vulnerability to rising interest rates.
Silicon Valley Bank’s seizure Friday, the biggest US bank failure since the financial crisis, was precipitated by fleeing depositors and sent shock waves across the global financial system.
As a systemically important bank, Credit Suisse follows “materially different standards” in terms of capital strength, funding and liquidity, Koerner said Tuesday. He said the lender had CET1 capital ratio of 14.1% in the fourth quarter and a liquidity coverage ratio of 144% that has since increased to about 150% on average.
Speculation about Credit Suisse’s financial health triggered record outflows of client money in early October, which have since normalized at a lower level but have yet to reverse. Koerner said Tuesday that the bank received “material good inflows” on Monday, a volatile day for financial sector companies as markets opened after the collapse of Silicon Valley Bank.
To help win back clients, Credit Suisse is offering deposit rates that are significantly higher than rivals, Bloomberg reported last month. Koerner has said while the bank is offering competitive rates, it’s not trying to buy assets.
Switzerland’s second-largest lender, which traces its roots back to 1856, has been pummeled over the last several years by a series of blowups, scandals, leadership changes and legal issues. The company’s 7.3 billion-franc loss last year wiped out the previous decade’s worth of profits.
(Corrects spelling of chairman’s name in first deck head.)
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