Record gain for Credit Suisse shares as markets surge after central bank lifeline – latest news

Credit Suisse shares fell more than 30 per cent on Wednesday – EPA

Stock markets have been boosted by a rebound in banking stocks after Credit Suisse said it would borrow funds from the Swiss central bank.

The FTSE 100 gained as much as 1.4pc after the agreement injected some confidence in the banking sector.

The blue chip index had suffered its steepest fall in over a year on Wednesday.

British banks gained 2.4pc, after falling 5.6pc in the previous session. HSBC and Barclays were amongst the top gainers on the FTSE 100, rising 2.2pc and 3.1pc respectively.

Credit Suisse shares jumped by a record 40pc at the open after it emerged it plans to borrow up to £44.5bn from the Swiss National Bank (SNB) to shore up liquidity and investor confidence.

Ammar Al Khudairy, chairman of Saudi National Bank, the largest shareholder in Credit Suisse, said the market panic is “unwarranted” as the bank is generally “sound”.

The bank announced it will borrow up to 50 billion Swiss francs (£44.5bn; $54bn) from Switzerland’s central bank after a collapse in its share price on Wednesday.

Read the latest updates below.

08:48 AM

‘Impossible to know’ how many doctors will return to work, Hunt admits

Jeremy Hunt said it was “impossible” to know how many doctors would be encouraged to return to work or take on extra shifts following his Budget decision to lift the cap on the tax-free lifetime pension allowance.

The Chancellor told BBC Radio 4’s Today programme:

What we want to do is solve the issue for doctors.

It is impossible to know the exact number, but what we do know is what doctors are telling us.

We do know that we have a shortage of doctors and we know we have a very big backlog, and that is why we’ve decided this is a very important measure to get the NHS working.

Mr Hunt pointed to Royal College of Surgeons statistics, saying the organisation had found that 69pc of their members had reduced their hours because of the “way pension taxes work”.

08:40 AM

Stock markets surge amid banking sector reassurance

Stock markets have been boosted by a rebound in banking stocks after Credit Suisse said it would borrow funds from the Swiss central bank.

The FTSE 100 gained as much as 1.4pc after the agreement injected some confidence in the banking sector.

The blue chip index had suffered its steepest fall in over a year on Wednesday.

British banks gained 2.4pc, after falling 5.6pc in the previous session.

Credit Suisse shares jumped by a record 40pc at the open after it emerged it plans to borrow up to £44.5bn from the Swiss National Bank (SNB) to shore up liquidity and investor confidence.

HSBC and Barclays were amongst the top gainers on the FTSE 100, rising 2.2pc and 3.1pc respectively.

Rentokil Initial jumped 6.6pc to the top of the FTSE 100 after the pest control services provider posted a nearly 28pc jump in full-year adjusted profit.

The more domestically-focussed FTSE 250 midcap index gained as much as 1.2pc as asset manager Bridgepoint Group rose 6.8pc after reporting a higher revenue for 2022.

08:21 AM

Hunt welcomes Credit Suisse intervention

Chancellor Jeremy Hunt said he welcomed efforts to boost the liquidity of Credit Suisse, as the bank’s share prices surged this morning after a sharp drop on Wednesday sparked fresh fears about the health of financial institutions.

Mr Hunt told Times Radio:

I hope you understand… Chancellors never comment on movements in markets for very obvious reasons, so I won’t give a comment on that.

All I will say is of course I monitor what is going on in the markets, the Bank of England governor monitors carefully what is going on; he keeps me informed.

I think the news we have heard from the Swiss authorities overnight is welcome.

Earlier, he told Sky News that the developments in Switzerland were “encouraging”.

08:19 AM

No bonus for John Lewis staff for only second time in 70 years

The John Lewis Partnership has said it will not hand staff a bonus for only the second time since 1953 after the retail group fell to a loss.

The group, which runs the department store chain and Waitrose supermarket arm, recorded a £78m loss before exceptional items for the year to January 28.

It represented a slump from a £181m profit in the previous year, with John Lewis blaming “inflationary pressures”.

In a letter to staff, John Lewis Partnership chairwoman Dame Sharon White said:

You’ve been exceptional in what has been another very tough year. Two years of pandemic and now a cost-of-living crisis.

Inflation has had a big impact on the partnership and sent our costs soaring – up almost £180 million on last year.

All in all, this has made for a tough set of results. We made a loss of £78 million.

I am sorry that the loss means we won’t be able to share a bonus this year or do as much as we would like on pay.

We’ll continue to help with the cost of living in other ways – the financial assistance fund will stay at £800,000 (a doubling) and there is support for travel, childcare and living costs.

John Lewis Partnership chairwoman Dame Sharon White

John Lewis Partnership chairwoman Dame Sharon White

08:15 AM

Credit Suisse shares make record surge

Shares in Credit Suisse has surged by a record 40pc at the open after its plans to borrow cash from the Swiss National Bank emerged.

Its shares plunged by as much 30pc on Wednesday and bets that it would default on its debts dramatically increased.

08:11 AM

Scrapping lifetime allowance could help save NHS £3bn, says Hunt

Scrapping the tax-free cap on the lifetime pensions allowance could help to reduce the £3bn spent per year on locum and agency staff in the NHS, the Chancellor said.

Jeremy Hunt, a former health secretary, told BBC Breakfast:

We looked at all the different options.

The other options, if we had a scheme that was just for doctors, it would actually be more aggressive because what we’ve announced doesn’t help the very wealthiest doctors.

It still keeps in a limit on the amount you can put in tax-free every year, but most importantly, it is something we can introduce in two weeks’ time and we can deal with a problem.

The NHS at the moment spends about £3bn a year paying for locum doctors and agency nurses because of these staffing shortfalls. This will help to reduce that, it will free up more resources.

The British Medical Association, who you might imagine I’m not on their Christmas card list, has said this is potentially transformative for the NHS and it means doctors will not now leave the NHS because of the way pension taxes work, and I think that is a very important step forward.

Chancellor Jeremy Hunt with his first Budget - Dan Kitwood/Getty Images

Chancellor Jeremy Hunt with his first Budget – Dan Kitwood/Getty Images

08:03 AM

Markets open higher after Credit Suisse backing

The FTSE 100 has bounced after its heavy losses in recent days after the Swiss central bank offered support to embattled lender Credit Suisse.

The blue chip index has risen 1.4pc to 7,443.39 after the open, while the domestically-focused FTSE 250 has climbed 1.1pc to 18,830.07.

07:58 AM

Hunt defends childcare policy rollout by 2025

Jeremy Hunt has defended the speed of the rollout of his Budget offer of free childcare for working parents with children under the age of five, a policy which will not be fully available until September 2025.

The Chancellor told Sky News:

This is the biggest transformation in childcare in my lifetime.

It is a huge change and we are going to need thousands more nurseries, thousands more schools offering provision they don’t currently offer, thousands more childminders.

We are going as fast as we can to get the supply in the market to expand.

But it is the right thing to do because we have one of the most expensive childcare systems in the world and we know it is something that is a huge worry, for women in particular, that they have this cliff-edge when maternity leave ends after nine months, no help until the child turns three and that can often be career ending.

So I think it is the right thing to do for many women, to introduce these reforms and we are introducing them as quickly as we can because we want to remove those barriers to work.

07:53 AM

Credit Suisse boss tells staff to ‘focus on facts’

The embattled chief executive of Credit Suisse has told his staff to focus on facts as he pledged to rapidly move ahead with a plan to streamline operations.

In a memo to staff, Ulrich Koerner said the bank would continue to focus on the transformation of Credit Suisse from a position of strength, citing an improved liquidity coverage ratio and recent capital raisings.

He said: “Effective communication is key to ensure that our clients and external stakeholders understand the strengths of the bank, our strategy and the accelerated progress we are making to create the new Credit Suisse.

“At times like this, it is important to focus on facts and reinforce the strengths of the bank.”

The memo came after the bank said it reached an agreement overnight with the Swiss National Bank to borrow as much 50 billion francs (£44.5bn) from a liquidity facility and offered to repurchase debt 3 billion francs of debt.

The additional steps to shore up finances came after its shares slumped by as much as 31pc on Wednesday in Zurich trading, and its bonds fell to levels that signal deep financial distress.

Credit Suisse chief executive Ulrich Koerner - Hollie Adams/Bloomberg

Credit Suisse chief executive Ulrich Koerner – Hollie Adams/Bloomberg

07:47 AM

Deliveroo hit by reopening of restaurants and pubs

Takeaway delivery firm Deliveroo has posted a £245.6m loss for the past year as order growth slowed.

However, the operating loss for 2022 was still 15pc smaller than the £290.1m loss it recorded a year earlier.

It came as the company also revealed a 9pc rise in gross transaction value to £6.8bn, as orders slowed following the reopening of restaurants and pubs after lockdowns.

Will Shu, founder and chief executive officer, said:

I’m proud of our performance in the past 12 months.

Our team has delivered in difficult market conditions, with continued growth and share gains in our key markets.

The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth.

Deliveroo - REUTERS/Eric Gaillard

Deliveroo – REUTERS/Eric Gaillard

07:41 AM

Markets expected to open higher

The FTSE 100 is on course to open up 1pc after the announcement Credit Suisse will borrow up to 50bn Swiss francs (£44.5bn) from Switzerland’s central bank after a collapse in its share price.

Contracts for the continent wide Euro Stoxx 50 index climbed more than 2pc.

Freddy Colquhoun, investment director at JM Finn, said the move has provided markets with some reassurance.

He told BBC Radio 4’s Today programme:

The focus will still be on the situation at Credit Suisse and then, as is always the case, market participants will look at other vulnerable banks.

Quite a lot of pain has been suffered over the course of this week and this news overnight will definitely provide reassurance. But the focus still remains on Credit Suisse.

07:32 AM

How Credit Suisse turned Switzerland’s banking industry into a national embarrassment

Even before the collapse in its share price, Credit Suisse has had a long list of problems over the last two years.

Banking & financial services correspondent Simon Foy takes a look back at its recent history:

Credit Suisse has been through hedge fund blow-ups; a $475m scandal in Mozambique; the swift departure of its gaffe-prone chairman; a money laundering conviction; surging withdrawals; and a £6.5bn annual loss.

The bank endured twin hits in 2021 following the collapse of supply chain finance group Greensill Capital and family office Archegos, triggering a prolonged period of crisis for the bank.

Those two scandals led to $10bn (£8bn) of its clients’ assets being frozen and a $5.5bn trading loss.

Last week, to add further insult to injury, Credit Suisse was forced to delay the publication of its annual report after an eleventh-hour query by US regulators on its previous filings.

The reason for the delay was revealed on Tuesday when the bank said it had identified “material weaknesses” in its reporting and controls procedures for the last two years in the latest blow to the scandal-hit lender.

Read Simon’s feature on how Credit Suisse turned Switzerland’s banking industry into a national embarrassment.

07:19 AM

Credit Suisse shares expected to surge

Credit Suisse shares were indicated to open 21pc higher in pre-market activity on the Swiss stock market, after the country’s central bank offered to fund the bank with liquidity.

The bank’s stock closed at 1.697 francs on Wednesday after a tumultuous day which saw its stock lose 30pc in value at one stage.

07:04 AM

Japan’s markets end lower after Credit Suisse turmoil

Tokyo stocks have ended the session lower, with investors in the grip of contagion fears amid the concerns about Credit Suisse following the collapse of Silicon Valley Bank and Signature Bank.

The benchmark Nikkei 225 index was down 0.8pc, or 218.87 points, to end at 27,010.61, while the broader Topix index lost 1.2pc, or 23.02 points, to 1,937.10.

The dollar fetched 132.86 yen, against 133.43 yen in New York late Wednesday.

The collapse of Silicon Valley Bank and Signature Bank had already left investors in panic mode and scrambling to sell when news of trouble at Credit Suisse added to their dismay.

Switzerland’s second-biggest bank tanked nearly 25pc after Saudi National Bank – its main shareholder – said it would “absolutely not” up its stake in the firm.

However, “excessive fears receded” once the news broke that Credit Suisse would borrow almost £44.5bn from the Swiss central bank to reinforce the group, the brokerage IwaiCosmo Securities said in a note.

06:57 AM

Bank of England’s late night talks with Switzerland

The Bank of England was holding emergency talks with international counterparts on Wednesday night after shares in Credit Suisse plunged as much as 30pc, spreading fear through the City of London that overshadowed Jeremy Hunt’s maiden Budget.

Frontline Analysts managing director Daniel Davis, who is a former Credit Suisse bank analyst and former Bank of England economist, told the BBC Radio 4 Today programme:

The nature of those calls going back and forth between London and Zurich will have been asking their central bank counterparts in Switzerland ‘do you stand behind this thing?’

The nature of these crises is that when you have a real massive deposit run, it is like a tsunami. Nothing humans can make can stand in the way of it.

The only thing you can do is stop it before it turns into a proper deposit run and the only people that can do that are the central banks.

06:47 AM

Credit Suisse generally ‘sound,’ insists top shareholder

Credit Suisse is not likely to seek more capital and the bank is generally “sound,” according to the chairman of the Swiss lender’s top investor.

Ammar Al Khudairy, chairman of Saudi National Bank, told CNBC: “If you look at what even the Swiss National Bank said yesterday with all the ratios, they’re all sound, everything is fine.

“I don’t think they’ll need more capital.”

It comes after comments by Mr Al Khudairy helped spark the biggest-ever slump in the bank’s stock on Wednesday.

He had said Saudi National Bank would “absolutely not” inject more cash into the institution, although he insisted this was for regulatory reasons. He added:

Markets are skittish and they’re looking for stories or things that validate concern.

We were never asked, and to my knowledge, there has never been any assistance sought.

06:38 AM

Credit Suisse – what has happened

It has been a busy night so let us quickly recap where we are.

Credit Suisse revealed overnight that it will borrow up to 50 billion Swiss francs (£44.5bn) from the Swiss central bank.

This move aims to shore up liquidity and investor confidence after a slump in its shares intensified fears about a global banking crisis.

The Swiss bank’s announcement helped stem heavy selling in financial markets in Asian morning trading.

This followed torrid sessions in Europe and the United States overnight as investors fretted about potential runs on global bank deposits.

06:29 AM

Handing over

Ok, Chanel Zagon signing off here. Thanks for following all the early Credit Suisse action. Chris Price is stepping in now.

05:49 AM

Virgin Orbit: Richard Branson’s satellite firm pauses operations and reportedly furloughs staff

Virgin Orbit, the Richard Branson-founded satellite launch firm has paused operations and furloughed staff while it attempts to secure more funding, according to a report.

The changes were announced at an all-hands meeting with employees on Wednesday, Bloomberg reported, citing a source. Nearly all Virgin Orbit staff were furloughed for the week, with limited staff remaining.

Chief Executive Dan Hart told staff in a meeting that the furlough was intended to buy Virgin Orbit time to finalise a new investment plan to help pull the company out of its financial woes, Reuters reported.

A spokesperson for Virgin Orbit, the sibling company of Mr Branson’s space tourism venture Virgin Galactic, confirmed the operations pause in a statement, but did not comment on the furloughs.

“Virgin Orbit is initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks,” the spokesperson said.

Read the full story here

05:07 AM

Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?

For years, Credit Suisse has been the bad apple of the European banking industry. A series of costly and cack-handed blunders had cost it billions and seen its share price slide almost continuously.

But on Wednesday, what had been a slow-burning mess exploded into an acute crisis that triggered a scramble across City trading floors.

What triggered the panic was two words: “Absolutely not”.

Read Simon Foy’s analysis here

05:00 AM

Loan soothes gravest fears but riddles markets with anxiety

Credit Suisse’s announcement that it will take up an option to borrow as much as 50 billion Swiss francs (£44.5bn) from Switzerland’s central bank soothed some of the gravest concerns and provided a floor to bank shares and a boost to Europe futures.

However, a nervous air hung over markets, with MSCI’s index of Asia-Pacific shares outside Japan falling to 2023 lows and down 0.9pc mid-morning. Japan’s Nikkei lost 1.3pc.

“I think we’re getting into the hard hat territory again,” said Damian Rooney, a dealer at Australian stockbroker Argonaut.

“The word contagion is knocking about…we’re getting fear across the whole board here.”

04:26 AM

Good morning

Credit Suisse announced overnight that it will take a loan worth up to £44.5 billion from Switzerland’s central bank.

It comes amid growing fears of a global banking crisis spreading out from the collapse of Silicon Valley Bank last week.

5 things to start your day

1) Budget 2023: the most important points from Jeremy Hunt’s speech | Spring Budget summary: free childcare expansion, lifetime allowance abolished

2) Winners and losers from the Budget 2023 – and what it means for your money | See how it affects you and use our calculators to see if you will be better off

3) Hunt accused of ‘a tax on the City’ as he battles to boost business investment | Britain will become the first major European country to bring in ‘full expensing’

4) More banks could go under, warns Larry Fink | Influential investor says it’s too early to tell how far the crisis will spread

5) Bank of England in emergency talks as crisis deepens at Credit Suisse | Instability contrasts with the improving picture the Chancellor painted in his maiden Budget

What happened overnight

Credit Suisse announced that it will borrow up to 50 billion Swiss francs (£44.5bn; $54bn) from Switzerland’s central bank to reinforce the group after its shares plunged. In a statement, the troubled bank said it was also making buyback offers on about 2.8 billion francs of debt.

Asian markets dropped on Thursday, led again by banks, with contagion talk sweeping across trading floors owing to fears about European giant Credit Suisse.

Credit Suisse stock plunged as much as 30pc to a record low overnight. The Swiss franc suffered its biggest drop on the US dollar in seven years.

Already jittery investors have been in panic mode since the collapse of two regional US banks over the weekend sparked a sell-off across equities and ramped up concerns of a global recession.

The developments sent shivers through markets as memories of the global financial crisis came flooding back.

Japan’s Sumitomo Mitsui Financial and Mitsubishi UFJ Financial plummeted more than 4pc apiece, while South Korea’s Hana Financial Group gave up nearly 3pc and HSBC dropped more than 2pc.

Hong Kong gave up more than 2pc, while Tokyo, Sydney, Shanghai, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta were also well down.

In other news overnight, the US has told TikTok’s owners in China to sell their shares or risk a ban of the popular video-sharing app, people familiar with the matter said. The latest move is a major escalation in the long-running standoff over privacy concerns around Chinese control of its data and algorithm.