Shares in scandal-sticken lender Credit Suisse rose nearly five per cent this morning as fears of an impending crisis began to settle after a turbulent day of trading yesterday.
The bank is up around 4.6 per cent on its opening price on the Swiss Six exchange after a sharp plunge yesterday spurred by a note from its boss on Friday reassuring staff of the bank’s liquidity position.
Credit default swaps (CDS) in the bank, which traders buy to insure themselves in case of default on its debts, soared yesterday morning to record highs but fell around 13 basis points to 308.32 bps.
Doubts over the solidity of Credit Suisse have been mounting after a string of crises over the past 18 months, including the collapse of Archegos Capital and Greensill Capital which left it nursing huge losses.
Credit Suisse has slumped to consecutive losses this year amid a major slowdown in its investment banking division and rising litigation costs.
Chief Ulrich Koerner is preparing to publish a major strategic overhaul of the bank this month, with asset sales and job cuts expected as part of range of measures to strengthen its balance sheet.
The bank is set to pare back its investment bank and is reportedly weighing a three way split, the FT reported last month. The move would reportedly see the bank sell profitable units such as its securitised products business to prevent a damaging capital raise.