Swiss bank Credit Suisse is moving ahead with the sale of some parts of domestic banking in order to raise capital, even as it is experiencing a roller-coaster ride. The embattled bank is looking to fill a liquidity gap of around $4.48 billion that is threatening its existence.
The Financial Times reported that the bank is looking to sell a stake in the SIX Group, a stake in Madrid-based tech company Allfunds, and the stakes in two specialist Swiss banks, Pfandbriefbank and Bank-Now and Swisscard. It has also put on the block its stake in a joint venture with American Express.
"We will update on progress on our comprehensive strategy review when we announce our third-quarter earnings," Credit Suisse the bank told Reuters. Credit Suisse troubles mounted last year when it lost than $5 billion after investment firm Archegos collapsed. Credit Suisse had a market capitalization of $22.3 billion just a year ago. The value crashed to just about $10 billion at the end of September, even as shares plunged 56 percent in one year to $3.98. Even after Monday's rally, the shares are still down some 50 percent year-to-date.
Earlier, Credit Suisse shares had rallied on news that bidders were expressing interest in buying its securitized products unit of the bank. The report was a welcome break for the Swiss wealth banking giant, which is rocked by a series of financial scandals. It also helped that the banking giant offered to buy back up to $3 billion of its own debt in order to allay fears over liquidity.
The bank was teetering on the edge a couple of weeks ago, raising fears that its putative collapse would create a Lehman Brothers-like crisis in the financial industry.
A few later, though, the shares plunged as fresh legal challenges cropped up. The newest crisis unfolded on news that the US Justice Department is investigating if the embattled Swiss banking giant helped its US customers hide hundreds of millions of dollars.
Credit Suisse also is also facing trial on currency rigging allegations in Manhattan. The class action suit that was launched in 2013 accuses the embattled Swiss banking giant of rigging the foreign exchange market and hurting customers.