Credit Suisse Group AG will probably overcome its financial distress but the blow to investor confidence may reverberate for years, according to ACY Securities.
(Bloomberg) — Credit Suisse Group AG will probably overcome its financial distress but the blow to investor confidence may reverberate for years, according to ACY Securities.
“Credit Suisse is very likely to survive this though it will be badly mauled for many years to come,” Clifford Bennett, chief economist for ACY Securities, wrote in a note Thursday.
The comments were released just before Credit Suisse said it’s planning to borrow as much as 50 billion francs ($54 billion) from the Swiss National Bank, with an offer to repurchase up to approximately 3 billion francs of dollar- and euro-denominated debt.
READ: Credit Suisse Taps $54 Billion From Central Bank to Stem Crisis
The latest development helped allay extreme fears, with US and European equity futures advancing Thursday in Asia. Credit Suisse’s shares plunged by a record Wednesday after its largest shareholder, the Saudi National Bank, said it wouldn’t be adding to its existing stake in the troubled bank.
While Credit Suisse has been working to alleviate concerns about its financial health for months, the collapse of Silicon Valley Bank triggered renewed anxiety about lenders.
“What we are seeing is a definite unraveling of investor confidence across both the tech and banking sectors,” Bennett wrote. “It is highly unlikely these concerns are going to simply vanish any time soon. This means we have entered an intensified period of investor nervousness more broadly.”
Asian bank stocks resumed a selloff. The MSCI Asia Pacific Financials Index fell as much as 2%, headed for its fourth loss in five sessions, with Japanese megabanks weighing the most on the gauge.
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