Swiss banks try to calm scared shareholders
SWISS financial institutions and firms that trade with them yesterday tried to reassure investors who had been walloped by the soaring franc last week, after the central bank removed the currency’s peg with the euro.
The Swiss National Bank shocked markets last Thursday when it stopped holding the franc at €1.20.
Giant bank Credit Suisse said it is sensitive to swings in the currency, but added that the final impact on its profits will depend on future moves in the franc.
Its shares edged up 1.74 per cent yesterday, as cautious investors dip their toes back in a stock that crashed 22 per cent last week.
Private bank EFG International yesterday said that if even if the strong franc does not weaken, its profits will not be hit by more than 10 per cent.
Its shares plunged by 25 per cent on the franc’s rise, but did recover a touch yesterday, rising 5.7 per cent on the bank’s assurances that its capital levels will not be hit.
But other firms received a tougher hearing from shareholders.
Shares in spreadbetting and forex trading site FXCM crashed by almost 90 per cent when they re-opened for trading in New York.
The stock had been closed after the firm made huge losses on the currency swing. It was bailed out to the tune of $300m (£198m) by parent firm Leucadia, but investors were not satisfied with the rescue.
Meanwhile IG Group confirmed it made a £30m loss on the volatility.