Credit Suisse shares reached another record-low for a fifth trading session in a row, after Saudi National Bank, the embattled bank's biggest investor, revealed it would not be able to provide any further financial aid in the future, as stated in Reuters report.

Credit Suisse in Crisis After Saudi National Bank Update

At the time of writing, Credit Suisse shares on the Swiss SIX exchange are losing around 17% of their value and slipping to EUR 1.86. Earlier this week, Finance Magnates reported that the bank was deepening historic lows in response to uncertainty in the global banking sector following last week's collapse of Silicon Valley Bank (SVB).

While the valuations of most major institutions have begun to rebound after the initial panic calmed down, Credit Suisse's deepening problems are preventing a bullish correction. Additionally, investors continue to assess the impact of Tuesday's announcement from the bank that it has found "material weaknesses" in its financial reporting over the past two years.

"We cannot because we would go above 10%. It's a regulatory issue," Ammar Al Khudairy, the Chairman of Saudi National Bank, told Reuters.

The Saudi bank became a significant shareholder in Credit Suisse last year when it purchased a 10% stake by participating in a capital raising round and pledged to invest up to $1.5 billion in the institution's growth.

Apart from the record low share prices, the rising cost of insuring the company's bonds against default seems to be a much more significant issue. According to S&P Global Market Intelligence data, the five-year credit default swaps widened from 549 basis points at the last close to 533 basis points.

Credit Suisse Sparks New Sell-Off in European and World Bank Stocks

The latest news from Saudi National Bank has not only influenced Credit Suisse but has triggered a new wave of unrest in European and global financial markets. Thus, the rebound from the initial shock caused by the SVB crisis proved short-lived.

The index of European bank shares slid by 2.5%, and US stock futures gave up 1% of their value. The depreciation of bank shares is visible on all major exchanges on the Old Continent from Warsaw, Frankfurt and Paris to London.

Amidst market volatility , investors gravitate towards safer investments, resulting in a rise in bond yields and the dollar's value. The DXY dollar index, which gauges the strength of the US currency against six major currencies, rose by 0.8% to 104.5, achieving the largest single-day increase in a week.

All signs suggest that investors are afraid of the Credit Suisse crisis worsening. While a collapse like that of the much smaller Silicon Valley Bank (SVB) seems unlikely at this point, the persistent issues plaguing the Swiss lender do not instill confidence.

Last week, Credit Suisse delayed the publication of its financial report following the US SEC call and announced further job cuts, this time in Japanese branches related to banking investments. After reporting a loss of over CHF 7 billion in 2022, the institution announced the need for strategic restructuring and a headcount reduction of up to 9,000 jobs.