Credit Suisse is reportedly seeking to assure investors as financial concerns rise

2 years ago 104

A Swiss emblem flies implicit a motion of Credit Suisse successful Bern, Switzerland

FABRICE COFFRINI | AFP | Getty Images

Credit Suisse executives are successful talks with its large investors to reassure them amid rising concerns implicit the Swiss bank's fiscal health, the Financial Times reported, citing radical progressive successful the discussions.

One enforcement progressive successful the talks told the Financial Times that teams astatine the slope were actively engaging with its apical clients and counterparties implicit the weekend, adding that they were receiving "messages of support" from apical investors.

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Shares of Credit Suisse touched caller lows past week. The banal is down astir 55% year-to-date.

Spreads of the bank's recognition default swaps (CDS), which supply investors with extortion against fiscal risks specified arsenic default, roseate sharply Friday. They followed reports the Swiss lender is looking to rise capital, citing a memo from its Chief Executive Ulrich Koerner.

FT said the enforcement denied reports that the Swiss lender had formally approached its investors astir perchance raising much capital, and insisted Credit Suisse "was trying to debar specified a determination with its stock terms astatine grounds lows and higher borrowing costs owed to standing downgrades."

The slope told Reuters that it's successful the process of a strategy reappraisal that includes imaginable divestitures and plus sales, and that an announcement is expected connected Oct. 27, erstwhile the slope releases its third-quarter results.

Credit Suisse has besides been successful talks with investors to rise superior with assorted scenarios successful mind, Reuters said, citing radical acquainted with the substance arsenic saying it includes a accidental that the slope whitethorn "largely" exit the U.S. market.

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The latest from Credit Suisse signals a "rocky period" up but it could pb to a alteration successful the U.S. Federal Reserve's direction, said John Vail, main planetary strategist astatine Nikko Asset Management, connected CNBC's "Squawk Box Asia" connected Monday.

"The metallic lining astatine extremity of this play is the information that cardinal banks volition astir apt commencement to relent immoderate clip arsenic some ostentation is down and fiscal conditions worsen dramatically," Vail said. "I don't deliberation it's the extremity of the world."

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"We conflict to spot thing systemic," analysts astatine Citi said a study astir the imaginable "contagion impact" connected U.S. banks by "a ample European bank." The analysts did not sanction Credit Suisse.

"We recognize the quality of the concerns, but the existent concern is nighttime and time from 2007 arsenic the equilibrium sheets are fundamentally antithetic successful presumption of superior and liquidity," the study said, referring to the fiscal situation that unraveled successful 2007.

"We judge the U.S. slope stocks are precise charismatic here," the study said.

Read the afloat Financial Times study here.

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