Credit Suisse Group AG (NYSE: CS) experienced a significant boost in its stock price, rising by 4.26% to reach $0.86 on Thursday. This surge comes in response to the latest development that the financial services firm has successfully repaid the government-backed liquidity it received, as confirmed by Swiss Finance Minister Karin Keller-Sutter.
During an interview with Swiss broadcaster SRF, Keller-Sutter revealed that Credit Suisse has fully repaid the liquidity provided by the Swiss government. The exact amount borrowed by the bank under the public facility backstop (PLB) scheme remains undisclosed. However, a reliable source informed Reuters that Credit Suisse had borrowed 70 billion Swiss francs out of the 100 billion Swiss francs ($112.50 billion) allocated for the program.
Credit Suisse had previously obtained funds from the Swiss National Bank, utilizing loans supported by default guarantees. However, the bank did not specify the extent of the credit facilities it utilized.
In its first-quarter earnings report in April, the bank stated that it had repaid 60 billion francs. This repayment resulted in net borrowings of 108 billion Swiss francs from the SNB.
According to Reuters, Credit Suisse had sought emergency liquidity assistance from the Swiss central bank in mid-March to overcome an impending liquidity shortage. Following this, the bank underwent a state-orchestrated rescue and was subsequently taken over by rival bank UBS. During this process, Credit Suisse gained access to over 200 billion francs in liquidity support. Out of this amount, 100 billion francs were backed by the government.
In its April report, Credit Suisse also revealed first-quarter outflows of 61 billion Swiss francs. Although the outflows had moderated by April 24, they had not yet reversed completely.
Earlier in May, Reuters reported that Credit Suisse came dangerously close to falling below the minimum levels of cash held at the Swiss National Bank just days before its forced takeover by UBS.
This latest development of Credit Suisse successfully repaying its government-backed liquidity has brought optimism to investors. As a result, there has been a significant rise in its stock price. The bank’s efforts to address its financial challenges and stabilize its position are being closely monitored by market observers.
