Burn. In the midst of the Russia-Ukraine war, the world is once again in danger of recession. Shares of Switzerland’s renowned financial credit Suisse Credit Suisse are seeing their most declining phase. This has increased the concern of investors. Credit Suisse CEO Ulrich Körner has asked for 100 days to fix everything. Ulrich took over as CEO in July. Since then, the condition of Credit Suisse is deteriorating. Looking at the figures from 1 year ago, the market cap of Credit Suisse was $22.3 billion. Now it has fallen to $ 10.4 billion. The share price of the company has gone up to $3.92. Earlier its share was worth about $ 14.
Analysis: Credit Suisse’s turnaround just got a lot tougher as market reels https://t.co/4fBk9yPn1L pic.twitter.com/4HB8ivPPS8
— Reuters (@Reuters) October 4, 2022
The company’s apprehensions of failure are also deepened because of a 15 per cent jump in its credit default swap CDS. This means that the chances of the company failing are very high. Earlier CDS was 57 bps. Now it has increased to 247 bps. Credit Suisse CEO Ulrich wrote in a memo to investors that the share price reflects the company’s poor financial condition. However, he claims that the capital base and liquidity position of Credit Suisse is better and stronger. The market capitalization of Credit Suisse which was a year ago has declined by 53 per cent. Senior deal maker Jens Welter resigned from this company after 27 years.
This condition of Credit Suisse was the last time the American company Lehman Brothers went bankrupt in 2008. The company declared bankruptcy on 15 September 2008. To save Lehman, the US Federal Reserve had negotiated with several companies. So that money can be invested in it, but all talks were unsuccessful. The bankruptcy of this company caused a loss of more than $ 600 billion. Lehman’s bankruptcy during the recession was a big blow to the world and America. Now the financial condition of Credit Suisse is scaring investors because of this.