2023-03-17 14:18:27 ET
At least four large banks have put limits on trades with Credit Suisse Group ( NYSE: CS ), Reuters reported Friday, citing five people with direct knowledge of the matter.
Societe Generale ( OTCPK:SCGLF ) ( OTCPK:SCGLY ) has maintained its existing counterparty positions with the French lender, which it had reduced in recent weeks. Going forward, it's not increasing them, two sources said.
Deutsche Bank ( DB ) this week cut back the lending value it assigns to CS securities such as bonds, put up by its wealth management clients as collateral for loans, an executive at a European wealth manager with ties to DB told Reuters.
At HSBC Holdings ( HSBC ), its private banking business is taking a more critical look at loans linked to Credit Suisse ( CS ) securities, which are owned by clients in Europe and Asia. The bank hasn't decided to reduce its exposure to the Swiss bank but is monitoring developments and plans to make a decision early next week.
Credit Suisse ( CS ) American depositary shares dropped 8.4% in Friday afternoon trading. In trading in Zurich, CS shares finished the session 8.0% lower .
Another major global bank that deals directly with Credit Suisse ( CS ) in Asia has started asking the Swiss bank to gross settle, in which the counterparty gets upfront payment instead of collecting any money owed later.
Still another unnamed bank reduced its unsecured exposure to Credit Suisse ( CS ), Reuters said.
The news organization also reported that the Swiss financial institution will hold meetings over the weekend to consider scenarios for the bank as it struggles to gain investor confidence after suffering years of scandals. The meeting will include teams of CFO Dixit Joshi.
Credit Suisse ( CS ) declined to comment to Reuters about either news article.
The company's stock bounced strongly on Thursday after it received assurances from the Swiss National Bank and Finma, and said it would borrow up to CHF 50B ($54B) from SNB.
Currently, SA Quant system rates the bank a Hold , the same as the average SA Author's rating .
SA contributor Tim Worstall makes the bull case for Credit Suisse , while SA contributor Dhierin Bechai explains the triple crisis stock crash.
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Large banks limit trades with Credit Suisse; Swiss lender to assess scenarios