Is Credit Suisse in trouble? Stock crash, Silicon Valley Bank contagion, delayed annual report

Zurich-based lender Credit Suisse on Monday felt pangs of the contagion sparked by collapse of Silicon Valley Bank. Credit Suisse shares hit a new record low in morning trading on Switzerland's stock exchange.

In a further reflection of investor concern about Credit Suisse's outlook, the price of some of its bonds fell sharply, with some at record lows.

Five-year credit default swaps for the Zurich-based lender jumped as much as 36 basis points on Monday to 453 basis points, according to pricing source CMAQ. 

The SVB shockwaves were felt across Europe, where the STOXX banking index fell as much 6.9% and was on track for its biggest two-day drop since March 2020. Germany's Commerzbank fell as much as 12.7%, while Credit Suisse hit a new record low after falling 15%.

The bank's shares pared some losses and were trading 9% lower and were trading at 2.27 Swiss francs per share, down from a previous low of 2.41 francs hit on Friday. They are down almost 20% year to date.

Last week it announced it was delaying the publication of its annual report following a call from the US Securities and Exchange Commission over previous financial statements.

Even before the turbulence caused by SVB’s collapse, investors were worried about Credit Suisse’s ability to put in place a restructuring plan that will pivot it further to private lending, hive off large parts of the investment banking business, and reduce costs by cutting 9,000 jobs.

Struggling to recover from a string of scandals, Switzerland's second-biggest bank has begun a major overhaul of its business, cutting costs and jobs and creating a separate business for its investment bank under the CS First Boston brand.

Twitter users started flagging concerns about the apparent warning signs at the major lender. 

"Credit Suisse down another 10%. Ready the ark. The fiat flood is approaching," said a Twitter user. 

With inputs from Reuters

ALSO READ: Biden says FDIC has control of assets of Silicon Valley Bank, Signature, no losses will be borne by US taxpayers