Shares of Swiss banking giant Credit Suisse fell by more than 20 percent and the cost of insuring its bonds against default soared on Wednesday after its biggest shareholder said it would “absolutely not” provide additional support.
The decline brought shares to an all-time low. Concerns about the bank’s health and stability have been weighing on the stock for three months.
The most recent sell-off appeared to be triggered by remarks from the chairman of Saudi National Bank, the biggest shareholder of Credit Suisse, when asked if the Saudi bank was open to further capital injections.
“The answer is absolutely not, for many reasons outside the simplest reason, which is regulatory and statutory,” Chairman Ammar Al Khudairy said in an interview with Bloomberg TV.
Al Khudairy said increasing his bank’s stake in Credit Suisse would bring an unwanted regulatory burden under Swiss, Saudi, and European laws.
“If we go above 10 percent, all new rules kick in whether it be by our regulator or the Swiss regulator or the European regulator,” he said. “We are not inclined to get into a new regulatory regime.”