Credit Suisse: double digit drop in Share Price in a day! Short of cash, Credit Suisse prevents customers accessing their money!
If Credit Suisse is under pressure to revamp its business and restore investor confidence, locking customers out of accessing their money is not the way to do it.
Dozens of angry customers were seen in Basel at the second largest branch where normally one can access the Bankautomats 24/7, but on Friday after 17.30 when people traditionally draw money for the weekend on their way home from their jobs, there was only a totally shuttered bank. And in typical Credit Suisse fashion, no notice, no communication, no customer orientation. The customer hotline had no answer either. Credit Suisse may notice a spike Monday in people moving accounts to other banks, if the sentiment of those gathered at Claraplatz is to be believed. One could feel the general spirit of exasperation of customers for Credit Suisse!
As a background to the current low for Credit Suisse, taking their share price decline this year to over 50 %, it was reported by Reuters that Credit Suisse was “sounding out” investors for a new capital raise. In addition, Reuters also reported that Credit Suisse was considering pulling its investment bank out of the US. Credit Suisse meanwhile denied it was planning to exit the US market. Asking shareholders for more capital would be a last resort given the depressed stock price, and not to forget that the sword cuts both ways, customers are also shareholders. As early as last April, Credit Suisse was going cap in hand to investors to raise SFr1.7bn of capital as it sought to rebuild its balance sheet following back-to-back crises involving Archegos Capital and Greensill Capital.
So how is that investment working out? The stock fell 12.4% on Friday 23 Sept. 2022. Since the collapse of Greensill in March 2021, which led to Credit Suisse eradicating $10bn of investment funds, the bank’s shares have plunged 67 per cent. The new joke in Switzerland is that it is cheaper to buy Credit Suisse stock than a coffee in Zurich.