75% loss in 8 days! Credit Suisse stock rout more severe that Adani crisis

Last month when Credit Suisse refused to accept Adani bonds in the wake of the Hindenburg report, little did anyone know that in the next few weeks the global investment banker will also suffer a stock crash worse than that of the Indian conglomerate.

In the last 8 trading sessions, Credit Suisse stock has lost over 74%. After the embattled bank was sold to rival UBS Group in a government-brokered rescue deal at a valuation of just $3.25 billion, the stock crashed over 63% to hit a low of SFr 0.68 on the exchange today. UBS's deal values the stock at 0.76 a share.

On the other hand, since the release of the Hindenburg report on January 25 Adani Group stocks have lost around 52% of their combined market value. In less than two months, Adani stocks have lost around Rs 10 lakh crore of its market value.

Credit Suisse stock is now trading at an all- time low level and has dropped more than 99% from its peak in 2007.

Under the terms of the merger agreement, all shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse. The trouble at the bank, which was brewing for the last two years, came at the forefront after Credit Suisse's 2022 annual report identified "material weaknesses" in internal controls over financial reporting.

Swiss regulator FINMA said it has been monitoring Credit Suisse intensively for several months. "During this time, the bank has taken a number of measures to stabilise the situation. These were not enough to restore confidence in the bank, however, and more far-reaching options were also examined," it said, adding that the crisis of confidence in e Credit Suisse Group was intensified by the upheavals in the US banking market in March 2023.

illiquid, even if it remained solvent, 

"There was a risk of the bank becoming was necessary for the authorities to take action in order to prevent serious damage to the Swiss and international financial markets," FINMA said.

Credit: ET Market