Exclusive: Some Credit Suisse counterparties curb dealings as bank heads into scenario meetings -sources

17 March (Reuters) – As Societe Generale (SOGN.PA) and Deutsche Bank (DBKGn.) Swiss banks struggle to restore confidence, five sources with first-hand knowledge of the issue To.

Credit Suisse declined to comment.

Details of the cautious stance adopted by Credit Suisse’s rivals were previously unreported, but after Credit Suisse shares tumbled in the aftermath of this week’s US banking crisis, the Swiss central bank gave lenders a lifeline. was brought in after throwing

Credit Suisse plans to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank on Thursday in what it calls a “decisive move” to boost liquidity.

Restrictions are added to the problem of banks trying to restructure operations and find a foothold after a series of costly scandals. Credit Suisse chief financial officer Dixit Joshi and his team will meet over the weekend to assess the bank’s strategic scenario, other people familiar with the matter told Reuters on Friday. Told.

Five people with direct knowledge of the bank’s counterparties requested anonymity due to the sensitivity of the situation.

Société Générale maintains an existing counterparty position with Credit Suisse, which it has cut in recent weeks, but has not increased, two sources with direct knowledge of the situation said.

Societe Generale declined to comment.

Meanwhile, Deutsche Bank this week lowered the lending value it allocates to Credit Suisse securities, such as bonds that wealth management clients pledge as collateral for loans, according to a German lender. Previously, banks valued them at around 70% to 80% of face value, the sources said.

Deutsche Bank declined to comment.

HSBC Holdings (HSBA.L)’s private banking arm has also launched a scrutiny of loans related to Credit Suisse securities held by customers in Europe and Asia, a person with direct knowledge of the matter said. The sources added that the bank has yet to make a decision on reducing its exposure to Swiss lenders, but is monitoring developments closely and expects to make a decision early next week.

HSBC declined to comment.

Another source at a major global bank that deals directly with Credit Suisse in Asia said their bank had started requiring full settlement from Swiss lenders. As a result of a later transaction.

Another global bank cut its unsecured exposure to Credit Suisse, according to people familiar with the matter. This includes unsecured loans. Banks continue to offer repo agreements, which are secured loans.

In Asia, a medium-sized Chinese brokerage that previously traded bonds and entered into derivatives contracts with Credit Suisse on Friday stopped underwriting counterparty risk with Swiss lenders, a person familiar with the matter said. person said.

Credit Suisse claims to be a strong global bank. “We meet and basically exceed all regulatory requirements. Our capital and liquidity base is very strong,” CEO Ulrich Kellner said in a media interview this week. is,” he said.

Lenders told Reuters on Thursday that the average liquidity coverage ratio, a measure of how much cash-like assets a bank has, stood at 150% as of March 14, with the U.S. stepping in to guarantee it. Said it was on the same scale as March 8, which had to be done. Her two bank deposits in the United States triggered the sale of the lender’s stocks and bonds.

Still, with investor confidence still weak, some analysts believe that lending from central banks could be a way for Credit Suisse to give it time to strategically consider what to do next to restore profitability. He said he just earned it.

Among possible scenarios, analysts, bankers and investors speculate that Credit Suisse could sell or wind down some of its existing businesses and collapse.

Reporting by Shankar Ramakrishnan, Sumeet Chatterjee, Stefania Spezzati, Vidya Ranganathan, Elisa Martinuzzi, Selena Li and Oliver Hirt.Edited by Paristosh Bansal, Edward Tobin and Elaine Hardcastle

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