SCBFF - Credit Suisse's AT1 bond writeoff has serious implications says Standard Chartered CEO
2023-03-24 11:13:50 ET
The wipeout of Credit Suisse's ( CS ) Additional Tier 1 bonds has "very profound implications for the regulation of banks, and for the way that banks manage themselves," Bill Winters, CEO of U.K. lender Standard Chartered ( OTCPK:SCBFF ) ( OTCPK:SCBFY ), told a financial forum in Hong Kong on Friday, as reported by Reuters.
As part of Credit Suisse's ( CS ) shotgun marriage with UBS Group ( UBS ), the former's AT1 bonds with a notional value of $17B will get written down to zero when the government-brokered deal closes, with Pimco and other holders of those securities posting sizable losses .
For StanChart ( OTCPK:SCBFF ), Winters assured that the bank's liquidity coverage ratio, a measure of how much so-called high-quality liquid assets it has to meet short-term obligations, is "substantially higher now," in a signal of the bank's resilience against a backdrop of global financial stress.
He said the ratio stood at 147% before several U.S. lenders failed earlier this month. In mid-February, the bank rolled out a $1B buyback plan and raised its dividend by 50%.
More on the Bank Crisis
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- EU regulators to focus on liquidity rules after Credit Suisse debacle
- Moody's warns on spillover risk; banks continue emergency borrowing
- Banking Crisis Dramatically Increases The Odds For 'Hard Landing' Recession
- Credit Suisse Collapse: Stock Is A Strong Sell On UBS Buyout
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Credit Suisse's AT1 bond writeoff has serious implications, says Standard Chartered CEO