European bank stocks took a fresh hit on Wednesday with Credit Suisse (SIX:CSGNPlunged to new record lows after the bank’s largest shareholder said it cannot increase its 10% stake over regulatory issues.
Credit Suisse fell below 2 Swiss francs ($2.18) for the first time in its history, after Saudi National Bank said it cannot exceed 10% stake due to regulatory concerns.
Credit Suisse shares were down more than 22% at time of writing. The Swiss stock trader stopped trading the shares several times, as volumes soared and shares plummeted.
The European bank stock index fell in the morning and was down 5% at midday, reaching its lowest level since Jan. 4. The index has lost 13% of its value since last Wednesday, marking its biggest weekly loss since Russia’s invasion of Ukraine last February.
“The markets are wild. We went from the problems of US banks to those of European banks, first of all Credit Suisse,” said Carlo Franchini, head of institutional clients at Ifigest Banking in Milan.
“This is dragging down the entire banking sector in Europe. Stocks accelerated losses following comments from the Saudis. (…) I believe that the Credit Suisse crisis can be solved and the bank will not be allowed to collapse,” Franchini said.
Shares of Swiss bank UBS were down 6.8% at time of writing. French banks BNP Paribas (EPA:BNPP) and Société Générale (EPA:SOGN) suffered decreases of 8.7% and 9.5%, respectively.
The Spanish bank Banco de Sabadell (BME:KNOW) and Germany’s Commerzbank (ETR:CBKG) ranged from losses of 6.5 per cent to 7.5 per cent.
(1 dollar = 0.9189 Swiss francs)