- Shares of Credit Suisse plummeted by more than a quarter of their value on Wednesday, reaching a historic low after its largest stakeholder, the Saudi National Bank, announced it would not provide additional funding to the struggling Swiss bank. Ammar Al Khudairy, the chairman of Saudi National Bank, informed Bloomberg and Reuters that it would no longer consider investments in the Swiss bank to evade regulations that come into effect when its stake surpasses 10%.
- The sudden plunge in Credit Suisse's stock price caused the Swiss stock market to impose an automatic suspension of its trading and caused shares of other European banks to plummet by double digits. This has reignited anxieties in regards to the stability of financial institutions, particularly after the Silicon Valley Bank's collapse in the U.S., and has caused concern about the well-being of midsized lenders.
Why it matters
Saudi National Bank invested $1.5 billion to obtain nearly 10% of Credit Suisse's shares in 2021. Credit Suisse's stock fell over 27% to 1.6 Swiss francs on Wednesday, down over 85% from its February 2021 price.