The year 2023 has been difficult for the banking sector as three notable banks have already failed, having an impact on the entire financial market. In the middle of this upheaval, the Saudi National Bank, Credit Suisse's largest shareholder, declined to offer additional financial support, causing the company's shares to drop to a new record low on March 15.
Ulrich Koerner, CEO of Credit Suisse Bank, recently assured investors that the bank's liquidity base is still solid.
JUST IN: $578 billion-asset bank Credit Suisse CEO says their "liquidity base is strong."
— Watcher.Guru (@WatcherGuru) March 15, 2023
The material weakness indicated in the bank's report, according to Koerner, had no effect on the results of its financial operations. He underlined that the financial performance of the bank is unaffected by the issue, which only relates to the financial reporting controls. Koerner further noted that Credit Suisse has high capital ratios and that the situation in the US is not analogous to that of the bank.
Despite Koerner's promises, the announcement caused the bank's stock prices to plunge by 27.36%. The price of Credit Suisse's shares at the time of publication was 1.90 CHF.
The Saudi National Bank's rejection to give Credit Suisse additional financial support was what caused the stock prices to fall. Investors are additionally reassured by the bank's high capital ratios.
Even if the banking sector is dealing with serious problems, it's vital to remember that different institutions may be in different positions. As per Credit Suisse CEO Koerner, there is no effect of the significant weakness in the report on the bank's financial results because the bank's liquidity basis is still robust. The ongoing banking crisis and the failure of three well-known banks this year, however, serve as a reminder of the significance of robust risk management and financial controls in the banking business.
