Over Rs.82,00,000 crores in investor wealth was eroded in global banking stocks

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From the beginning of the banking crisis in America, Europe till now


Mumbai: In order to control the inflation, the short-term sharp increase in the interest rates made the credit of the central banks of America and European countries very expensive, pushing the global banking and financial sector into an extraordinary crisis, and in the month of March, the wealth of investors in finance, banking stocks, i.e. one lakh crore dollars in the investment value of the stocks. That a massive erosion of Rs.82,00,000 crores has taken place. Shares of Credit Suisse fell more than 65 percent in one day to 0.66 Swiss francs and UBS shares fell 8 percent to 14.38 Swiss francs.

In the events that started with the rise of American and European banks, now even after the takeover decision of Credit Swiss Group AG by UBS for 3.25 billion dollars, instead of easing the crisis, the confidence of investors in the banking system of American and European countries has started to rise. Despite the $3.25 billion takeover of Credit Suisse by UBS, the value of the $17 billion bonds held by Credit Suisse's bondholders, i.e. investors, is now almost zero. That means the investors have to withdraw.

After the events that started on March 9, 2023 when the American Silicon Valley Bank (SVB) fell into crisis, the news of the failure of the American banks First Republic Bank and Signature Bank one after the other shook the banking-financial sector of the world, for the last one week, the finance companies and banks of the European countries have been affected by the crisis. has created Switzerland's largest banking giant Credit Suisse Group AG. There are continuous gaps in the stocks of financial, banking sector companies in the markets of European countries in trouble. In which the share of Credit Swiss Group AG has collapsed by more than 70 percent in the last 10 days.

In the last 10 days in American banking and finance stocks, the share price of First Republic Bank fell by 82.78 percent to $18.80 in the New York stock market, US Bancorp fell by 25.37 percent to $33.95, Capital One fell by 13.43 percent to $90.85, Bank of America Corp fell 13.58 percent to $28.14, Wells Fargo fell 13.65 percent to $37.86, Goldman Sachs fell 11.92 percent to $30.768, Morgan Stanley fell 11 percent to $85.50, Citigroup fell 12 percent to $44.65, JP Morgan Chase fell 7.45 percent to $127.50.

In the stock markets of European countries, the price of Credit Suisse Group AG fell by more than 62 percent today and fell by 70 percent to 0.85 Swiss francs in the last 10 days, UBS fell by 14 percent to 17.25 Swiss francs, Deutsche Bank AG fell by 20 percent to 9.20 euros. , BNP Paribas fell 17.75 per cent to 51.52 euros, Barclays fell 14.25 per cent to 6.75, Credit Agricole fell 12 per cent to 9.96, HSBC fell 14 per cent to 535 pounds, Societe Generale fell 21.5 per cent to 21 euros, Lloyds The banking group fell 11 percent to 46 pounds. In the Indian stock markets as well, as a result of the continuous sell-off in banking, finance stocks, Rs.10 lakh crore has been eroded from investors' wealth.

The Saudi National Bank lost a billion dollars investing in Credit Suisse shares

Despite the decision of UBS to buy it for 3.25 billion dollars after Credit Suisse came into crisis, on the one hand, the total investment of 17 billion dollars i.e. Rs. The bank is also known to have lost more than a billion dollars on its investment in Credit Suisse.

According to a report, Riyadh-based Saudi National Bank became the largest shareholder with a 10 percent holding by investing 1.4 billion Swiss francs, i.e. 1.5 billion US dollars, in Credit Suisse in November 2022 at a price of 3.82 Swiss francs per share. 80 percent of this investment has been washed away. A deal by UBS to buy Credit Suisse at a price of 0.76 Swiss francs per share has washed many investors' capital into Credit Suisse.

Saudi National Bank said in a statement that its broad strategy will remain the same as before, its share price was trading up 0.58 percent today. As of December 2022, Saudi National Bank's investment in Credit Suisse accounted for 0.5 percent of Credit Suisse's total assets and 1.7 percent of its investment portfolio.

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