Monday saw shares in Credit Suisse fall by 2.6 per cent following concerns over reportedly imminent write-downs . Having been relatively unaffected by the credit crisis in comparison to its rivals, reports emerged in the Swiss media at the weekend that the bank would be forced to write down over £1 billion for its fourth quarter operations on its leveraged loans and commercial mortgages business.
Write-downs have become common practice amongst banks in recent months as they look to raise sufficient capital to protect themselves against collateralised debt obligations, for example. However, having just given British lender Alliance and Leicester a £4 billion loan with a two year maturity period, it would come as a surprise if such a write-down was necessary in order to raise capital.
Though reports of such a write-down are doing Credit Suisse no favours whatsoever, their troubles are minimal when compared to those of their rivals. Swiss rivals UBS have been perhaps the hardest hit by the credit crisis, having written off over £5 billion of debts relating to the sub-prime US mortgage sector.
Credit Suisse Shares Fall as Bank is Hit by Write-Down Rumours
Credit Suisse Shares Fall as Bank is Hit by Write-Down Rumours
Mon, 14 Jan 2008
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