As Credit Defaults Approach 2009 Level, Credit Suisse CEO Seeks to Assure Jittery Investors
Posted on 10/02/2022
As Europe faces a dark winter and a war on the continent, Credit Suisse Group AG is facing stress in the credit default swap markets. On Friday (September 30, 2022), Credit Suisse Chief Executive Officer Ulrich Koerner tried to calm down staff that the bank has a “strong capital base and liquidity position” and told employees that he will be sending them a regular update until the firm announces a new strategic plan on October 27, 2022. The cost of insuring Credit Suisse’s bonds against default climbed about 15% last week to levels not seen since 2009. Ulrich Koerner was named CEO in late July 2022 after the last CEO was caught in a scandal.
“I know it’s not easy to remain focused amid the many stories you read in the media – in particular, given the many factually inaccurate statements being made. That said, I trust that you are not confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank,” he wrote.
On Twitter, scores of users are calling the CDS pricing on Credit Suisse a “Lehman moment”. However, Credit Suisse Group AG qualifies as a global systemically important bank (G-SIB) and is required to disclose these G-SIB indicators on an annual basis.
Credit Suisse is also looking to cut more jobs, while investment bankers are exiting the Swiss bank. Credit Suisse has been reaching out to investors for potential capital.
Large Shareholders
According to the bank’s website, BlackRock is the largest shareholder with an approximate 4.11% shareholding. Other major investors include Dodge & Cox, Harris Associates L.P., Saudi-based Olayan Group, Qatar Holding LLC (Qatar Investment Authority), and Silchester International Investors LLP.
