Credit Suisse shares fell 4 per cent on Wednesday, bringing this week’s decline to nearly 20 per cent. Already under pressure from its exposure to failed supply chain finance firm Greensill, Credit Suisse’s plans to buy back shares and pay dividends this year could now be at risk, analysts said.
The bank’s market capitalization has shrunk by five billion Swiss francs since Friday to 25.57 billion Swiss francs . Sources estimate Credit Suisse’s losses may total US$5 billion but the bank declined to comment.Article content UBS analysts said “a lot of unanswered questions” remained, referring to Credit Suisse’s involvement first in Greensill and now the U.S.-based hedge fund.
“Outflows? P&L impact? Insurance coverage? Quality of underlying assets? Litigation? Developments around involved partners? Reputational impact? Impact on strategy?” they wrote.Meanwhile Nomura which has warned of a US$2-billion hit from Archegos, fell a further 2.9 per cent following a 0.8 per cent fall on Japanese stock markets on Wednesday. Its market capitalization has dropped from 2.3 trillion yen to 1.88 trillion yen since Friday, Refinitiv data shows.
Ratings agencies added to the pressure as Moody’s slashed its outlook on Nomura to “negative,” citing potential deficiencies in its risk management process.
Again a financial crisis caused by the greed of banks that just could not resist making short term profit servicing an account run by a known high risk investor.