Europe Bank Shares Rebound After Credit Suisse Liquidity Boost

By Pierre Bertrand

European bank shares rebounded Thursday after the news that Credit Suisse Group AG is borrowing from the Swiss National Bank to strengthen liquidity reverberated through the sector.

At 0925 GMT shares of Swiss peer UBS Group AG rose 4.2% while in Germany, Commerzbank AG shares rose 3.1.% and Deutsche Bank AG traded more than 1% higher. As of 0922 GMT French banks traded higher: BNP Paribas SA shares rose 1.0%, while Societe Generale SA and Credit Agricole SA traded under 1% higher.

As of 0923 GMT in London, HSBC Holdings PLC shares rose nearly 2% while Barclays PLC shares jumped by 2.8% and NatWest Group PLC climbed 3.4% higher. In the Netherlands, ING Groep NV shares rose 1.3% and ABN AMRO Bank NV traded under 1% higher.

Credit Suisse shares, which yesterday declined to a record low, traded more than 19% higher Thursday, after it said it would borrow nearly $54 billion from the Swiss central bank to "pre-emptively strengthen its liquidity".

The share price increases come as the European Central Bank's governing council prepares to meet later Thursday to decide on interest rates.

Unease emanating from Credit Suisse's position on the back of market fallout from the collapse of the U.S. Silicon Valley Bank sent European banking shares tumbling Wednesday.

On Wednesday the Swiss Financial Market Supervisory Authority and the Swiss National Bank issued a joint statement committing to provide liquidity to the Swiss bank. Credit Suisse later said it would exercise its option to raise as much as 50 billion Swiss francs ($53.57 billion) to bolster its liquidity.

"The problems of certain banks in the U.S.A. do not pose a direct risk of contagion for the Swiss financial markets. The strict capital and liquidity requirements applicable to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks," the joint statement said.

Write to Pierre Bertrand at [e-mail]

(END) Dow Jones Newswires

March 16, 2023 05:49 ET (09:49 GMT)

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