Credit Suisse shares drop to fresh record low, CDS widen By Reuters

© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) – Credit Suisse shares continued to fall on Wednesday, dropping by as much as 8.7% to a new record low, as investors assessed the potential impact of weaknesses in internal controls.

Credit Suisse on Tuesday published its annual report for 2022 saying the bank had identified “material weaknesses” in controls over financial reporting and not yet stemmed customer outflows.

Switzerland’s second-biggest bank is seeking to recover from a string of scandals that have undermined the confidence of investors and clients. Customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion).

The shares were last down 8.2% at 2.059 Swiss francs ($2.31) in Zurich, heading for a seventh straight daily decline.

The cost of insuring the company’s bonds against default also shot up. Five-year credit default swaps on Credit Suisse debt widened to 533 basis points from 549 bps at last close, according to data from S&P Global (NYSE:) Market Intelligence.

Meanwhile, its top shareholder ruled out providing more financial assistance to the struggling Swiss bank, Bloomberg News reported on Wednesday, citing Saudi National Bank Chairman Ammar Al Khudairy. 

($1 = 0.9151 Swiss francs)