Shares of Credit Suisse on Wednesday hit another all-time low for a second consecutive session, dropping by more than 24%.
Trading in the bank’s plummeting shares was halted several times throughout the morning. The stock recovered slightly by around 11:30 a.m. London time but was still down more than 18% on the day.
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Several Italian banks were also subject to automatic trading stoppages after sharp declines on Wednesday, including UniCredit, Finecobank and Monte Dei Paschi.
Credit Suisse’s largest investor, Saudi National Bank, said it could not provide the Swiss bank with any further financial assistance, according to a Reuters report, sparking the latest leg lower.
“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters Wednesday.
Meanwhile, speaking to CNBC’s Hadley Gamble during a panel session in Riyadh on Wednesday morning, Credit Suisse Chairman Axel Lehmann declined to comment on whether his firm would need any sort of government assistance in the future.
When asked if he would rule out some kind of assistance, Lehmann answered: “That’s not the topic.”
“We are regulated, we have strong capital ratios, very strong balance sheet. We are all hands on deck. So that’s not the topic whatsoever.”
The Saudi National Bank took a 9.9% stake in Credit Suisse last year as part of the Swiss bank’s $4.2 capital raise to fund a massive strategic overhaul aimed at improving investment banking performance and addressing a litany of risk and compliance failures.
Investors are also continuing to assess the impact of the bank’s Tuesday announcement that it had found “material weaknesses” in its financial reporting processes for 2022 and 2021.
The embattled Swiss lender disclosed the observation in its annual report, which was initially scheduled for last Thursday, but was delayed by a late call from the U.S. Securities and Exchange Commission (SEC).
The SEC conversation related to a “technical assessment of previously disclosed revisions to the consolidated cash flow statements in the years ended December 31, 2020, and 2019, as well as related controls.”
In late 2022 the bank disclosed that it was seeing “significantly higher withdrawals of cash deposits, non-renewal of maturing time deposits and net asset outflows at levels that substantially exceeded the rates incurred in the third quarter of 2022.”
Credit Suisse saw customer withdrawals of more than 110 billion Swiss francs in the fourth quarter, as a string of scandals, legacy risk and compliance failures continued to plague it.