Uncertainty in the banking sector following the collapse of several regional US banks continues to keep investors in suspense. This was particularly evident at the ailing investment bank Credit Suisse, which, moreover, cannot rely on further help from the Saudi National Bank. According to a representative of the major shareholder in an interview with “Bloomberg TV”, the shares of the Swiss institute went down rapidly.
After a stable start, the Credit Suisse share price in Zurich fell by more than 20 percent to a record low: at times, the shares were only worth just over 1.75 francs (1.79 euros). When they were still young, they lost more than a quarter of their value after having collapsed by almost 70 percent in the previous year. In 2007 they had cost more than 90 francs. The Swiss competitor UBS followed the downward trend on Wednesday with a minus of more than four percent.
Commerzbank and Deutsche Bank widen losses
At the same time, the entire European banking sector and the entire stock market went downhill again after stabilizing the previous day: The Stoxx Europe 600 Banks index recently lost almost six percent to a new low since the beginning of January. Its annual plus shrank to a good three percent.
While the stocks of Commerzbank and Deutsche Bank each increased their losses to more than seven percent, French banks such as BNP Paribas in particular also went down significantly.
The chairman of the Saudi bank, Ammar Abdul Wahed Al Khudairy, categorically ruled out additional support for Credit Suisse in an interview with “Bloomberg TV”. There are many reasons for this – not just legal and regulatory. The state-owned Saudi National Bank supported the bank with a capital injection at the end of 2022 and has held almost ten percent of the shares since then, making it the largest shareholder in the ailing bank. The second largest shareholder is the state-owned Qatar Investment Authority (QIA), which holds almost seven percent of the shares.
Investors in the international financial sector have been worried for days, mainly due to the collapse of the US Silicon Valley Bank (SVB). The analyst Beata Manthey from the US bank Citigroup, for example, warned of further short-term price risks on Wednesday, especially since investors are still heavily involved in the sector.
industry under stress
Banks are considered to be the beneficiaries of the turnaround in interest rates because they benefit from higher key interest rates. Accordingly, investors had been banking on the industry for months. The analyst Konstantin Oldenburger from the trading company CMC Markets is now wondering how the ECB will communicate its future monetary policy on Thursday as part of its interest rate decision – in a financial market environment that “has been under quite a bit of stress due to the first major bank collapses in the USA since Lehman Brothers This is where investors will listen very carefully.”
With regard to the US Federal Reserve, some experts are already assuming a pause in the interest rate turnaround in March, instead of the small key rate hike previously expected. The banking crisis would thus also slow down the fight against inflation.
