Credit Suisse Stock Craters To All-Time Low, Europe Banks Retreat, Weakness Spills To U.S.

Credit Suisse (CS) unraveled early Wednesday, with CS stock falling nearly 28% premarket after its largest backer said it would not provide the Swiss bank with more financial assistance. European stocks retreated as Credit Suisse stock spun lower. The fresh financial weakness spilled over to U.S. banking stocks, ending Tuesday’s brief reprieve.

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The chairman of Saudi National Bank, Credit Suisse’s top shareholder, ruled out further financial intervention for the Zurich-based bank in an interview with Bloomberg early Wednesday. The news comes after Credit Suisse released its delayed annual report Tuesday, which noted “material weaknesses” to its financial controls and reporting for 2021 and 2022.

The bank recorded losses the last five quarters. Revenue declined in four of five recent reporting periods. Credit Suisse stock declined 68.6% over the past year. Wednesday’s 27.5% premarket drop sent shares to an all-time low of 1.82.

European Bank Declines Spill To U.S.

The Credit Suisse meltdown rippled out across European banks and financials Wednesday. Trading for several was temporarily halted on European exchanges. In U.S. premarket action, fellow Swiss bank UBS (UBS) retreated more than 9%. Germany’s Deutsche Bank (DB) also dropped more than 9%.

The weakness rekindled selling among U.S. bank stocks , particularly among larger banks with broad international exposure. U.S. banks and financials saw a slight rebound Tuesday as the financial sector digested regulatory efforts to contain the contagion from SVB Financial (SIVB) and Signature Bank (SNBY).

JPMorgan (JPM) stock slumped more than 3% premarket Wednesday while Wells Fargo (WFC) took a 5% dive.

Regional banks First Republic (FRC) and Western Alliance (WAL) retreated 5.4% and 8.1%, respectively Wednesday morning after rebounding Tuesday afternoon. Beverly Hills, Calif.-based Pacwest (PACW), which had rebounded 33% on Tuesday, tumbled more than 16% before Wednesday’s opening bell.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

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