Credit Suisse collapses: what happens to the stock

As we write the shares of the Swiss giant Credit Suisse on the Zurich stock exchange are worth 4.18 Swiss francs (4.37 euros) with a daily decline close to 10%. In the last month, the multinational financial services company has lost 16% and, since the beginning of 2022, has left 48% on the ground.

The Swiss financial information site Inside Paradeplatz talks about a “bank fighting for survival”, also rejoining the persistent rumors according to which Credit Suisse would aim for a capital increase, thus exposing the shares to risk of depreciation. These are the current misfortunes of the bank founded in 1856 and which for years has been confronted with a decline in its share value.

Division into three

According to the Financial Times, Credit Suisse is thinking of dividing the investment sector into three parts, first aiming at a sale of profitable assets to avoid the capital increase. At a later stage, it would be possible to divide the consultancy activities from the other still profitable activities, thus letting go of the “bad bank” activities and the assets at risk.

For the moment it is a theory that the Financial Times says it has developed on the basis of sources inside the company but it is no secret that the CEO of Credit Suisse, Ulrich Körner, was appointed last July with the task of reorganizing the group that, in recent years, has been at the center of many lawsuits, the closure of investment funds, considerable losses and also at the center of a case of corporate espionage.

Five thousand employees at risk

The reorganization of the giant would cost at least 5 thousand jobs and the costs to correct the failure of the investment division they would be around 4 billion Swiss francs (4.19 billion euros) but, as mentioned, the top management of Credit Suisse prefer not to resort to the market to hoard capital.

The bank could illustrate its strategy on October 27th, coinciding with the results of the third quarter of 2022, but the recourse to cutting the workforce (today about 50 thousand people worldwide) seems inevitable, also considering the huge losses of the recent months (273 million francs, or 285.74 million euros, in the first quarter of 2022 alone).

The descent without brakes

The fortunes of the Swiss banking group have been mixed for years. In 2000, the shares were worth 96.50 Swiss francs, which fell to 19.1 francs in 2003 to get back on top and revise 96 francs in 2007, when the world was preparing for the financial crisis. From there the descent was long and steady: in 2015 the highest share price settled close to 29 Swiss francs, which became 18 francs in 2018 and then 14 francs per share in 2020, reaching an all-time low today.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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