European banks battered as Credit Suisse drops 20% By Reuters

© Reuters. FILE PHOTO: A logo is pictured on the Credit Suisse bank in Geneva, Switzerland, February 22, 2023. REUTERS/Denis Balibouse/

(Corrects UBS share price move in 7th paragraph to last down 6.8%)

LONDON (Reuters) – Shares in European banks got pummeled again on Wednesday, as Credit Suisse plunged to fresh record lows after the lender’s biggest shareholder said it could not raise its 10% stake citing regulatory issues.

Credit Suisse fell below 2 Swiss francs ($2.18) for the first time after Saudi National Bank said it could not go above 10% ownership due to a regulatory issue.

Credit Suisse shares were last down by more than 22%. Trading in the shares was halted a number of times by the stock exchange operator as volumes soared and the stock plummeted.

An index of European bank stocks fell in morning trading and was last down 5%, hitting its lowest level since January 4. The index has lost 13% in value since last Wednesday, marking its biggest week-on-week loss since Russia’s invasion of Ukraine last February.

“Markets are wild. We move from the problems of American banks to those of European banks, first of all Credit Suisse,” said Carlo Franchini, head of institutional clients at Banca Ifigest in Milan.

“This is dragging lower the whole banking sector in Europe. The shares accelerated losses after the Saudis (commented) …I believe Credit Suisse’s crisis can be solved and the bank will not be let to go belly up,” Franchini said.

Shares in Swiss bank UBS were last down 6.8%. French banks BNP Paribas (OTC:) and Societe Generale (OTC:) saw declines of 8.7% and 9.5%, respectively.

Spanish bank Banco de Sabadell and Germany’s Commerzbank (ETR:) fell by 6.5-7.5%.

(This story has been corrected to fix the UBS share price move to last down 6.8% in paragraph 7)

($1 = 0.9189 Swiss francs)

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By Reuters