Credit Suisse shakes the stock markets, with falls of 4% for the IBEX 35, after losing the Saudi support.

Credit Suisse shares are currently down more than 20 % on the Zurich Stock Exchange and are causing a strong earthquake in all European stock markets after the Saudi National Bank, its main shareholder, decided not to inject more money into the Swiss entity to its battered accounts. The IBEX 35 is down 4% at mid-session with a strong near-quarterly fall.

Shares in the Zurich-based bank fell below 2 Swiss francs (2.04 euros) for the first time and now stand at 1.7 francs (1.73 euros).

The plunge, which follows several very negative days for the bank, dragged down by the stock market crisis caused by the collapse of US-based SVB, coincides with statements by the chairman of the Saudi state bank, Ammar al Khudairy, announcing that there will be no further capital injections by the bank.

“We can’t because we would exceed 10 per cent (of the shareholding), it’s a regulatory issue,” he told Bloomberg.

The Saudi bank acquired that 10 per cent of shares last year in the capital increase launched by Credit Suisse, an investment in which the Middle Eastern bank invested 1.5 billion Swiss francs (1.53 billion euros).

In 2022, the Zurich-based bank showed a loss of 7.293 billion Swiss francs (around 7.4 billion euros) in 2022, 4.5 times more than in 2021.

Affected by its exposure to financially troubled risky firms such as Archegos and Greensill, Credit Suisse also suffered a CHF 123.2 billion (EUR 126 billion) withdrawal of liquidity last year.

Second plunge in the IBEX 35 in three days

The Spanish stock market is being dragged down by the sharp fall in banks due to fears of a bankruptcy of the Swiss bank Credit Suisse, which adds to the collapse of the US Silicon Valley Bank, and at midday its main selective, the IBEX 35 fell 3.9% and lost the level of 8,900 points.

At 12.00 the IBEX 35 loses 355.7 points, that 3.9 %, and stands at 8,812.4 integers, after the sharp fall of Credit Suisse today, more than 20 % in the Zurich Stock Exchange, after advancing the Saudi National Bank, its main shareholder, that will not give the Swiss entity more financial assistance to deal with its complicated situation.

Like the Spanish stock market, the other European markets also increased their falls notably with respect to the opening, also affected by Credit Suisse, and Paris lost 3.64 %; Milan, 3.17 %; Frankfurt, 3.12 %, and London, 2.56 %.

The Euro Stoxx50, the index comprising the largest capitalised European companies, also fell 13.63 %.

The biggest falls

In the IBEX 35, the biggest fallers were Banco Sabadell, down 8.74 %, BBVA, down 7.68 %, Bankinter, down 6.92 %, Santander, down 6.69 %, and Caixabank, down 5.83 %.

Only Iberdrola gained a meagre 0.6 %

For its part, Inditex lost 5.45% after presenting its results today, in which it earned 4.13 billion euros in the first fiscal year with Marta Ortega as the group’s chairwoman, which is 13.5% more than in the pre-pandemic year 2019.

In the continuous market, the biggest fall is for Tubos Reunidos, which loses 11.22%, while Vocento is the stock that rises the most, followed by Iberpapel, with 1.83%; Desa, with 1.43%, and Inmobiliaria Sur, with 1.37%.

In the debt market, the interest rate on long-term German bonds fell to 2.253%, while the Spanish bond also fell to 3.351%.

The risk premium in Spain stands at 110.9 %.

Oil prices fell and Brent, the benchmark in Europe, after falling 1.41 % to 76.25 dollars a barrel, while the West Texas Intermediate (WTI), the US benchmark, fell 1.61 % to 70.25 dollars.

The euro is down 1.15 % at 1.06 dollars.