Credit Suisse shares were under heavy pressure again on Friday and fell to all-time lows. Thus, they continue the downward trend that has continued since Wednesday, when the ailing big bank announced its new multi-billion dollar losses and high client fund outflows.
At around 3:20 p.m., shares of the second-largest Swiss bank fell 5.9 percent on an overall tight stock market, trading at CHF 3,337, its lowest level ever. The previous all-time low was CHF 3,518 from the beginning of October.
On Friday, Bank Vontobel’s stock research department lowered its price target to CHF 3.50 from the previous CHF 4.00. Analyst Andreas Venditti now expects not only a huge annual loss for 2022, but also a negative result in 2023 and a barely positive result in 2024.
Immediately stop the exits in the main line of business
In a comment, the Vontobel expert was also “surprised” by the massive outflow of client assets in the wealth management business. In just six weeks, about 10 percent of assets under management were gone, he recalls. The bank now urgently needs to stop the exits from its core business. The subbase of assets under management will also put pressure on next year’s revenues.
Bloomberg news agency reported on Thursday that rivals UBS and Morgan Stanley benefited from the loss of CS customers, particularly in their Asian business.
On Thursday, CS also completed the first of two capital increases decided by the extraordinary general meeting. New shares of the new main shareholder Saudi National Bank and other qualified investors are now traded on the Swiss stock exchange.
Shares without subscription rights
As part of the second capital increase, existing shareholders will be allocated one preemptive right per share – seven preemptive rights entitle the holder to purchase two new shares for CHF 2.52 each. From Monday, CS shares will be traded on the exchange without subscription rights, which will put additional pressure on the title. From Monday, separate exchanges will be traded for subscription rights. (pbe/SDA)