Credit Suisse saw its stock price drop by 30 percent on Wednesday, sent lower by comments from the Saudi National Bank (SNB) Chairman. It is now asking an institution with the same acronym for a show of support. Europe is concerned.

The situation around Credit Suisse is dire. According to a report in the «Financial Times» (behind paywall) on Wednesday, the troubled bank has asked the Swiss National Bank (SNB) for a statement of public support.

Shares plunged as much as 30 percent to 1.55 francs on Wednesday, triggering a broader sell-off in European and US banking stocks.

No More Capital From Saudi Arabia

As finews.asia reported, the rout was sparked when the Chairman of an institution with the same acronym as Switzerland's central bank, the Saudi National Bank, Ammar Al Khudairy, said «his» SNB would not infuse more capital into Credit Suisse. «We cannot because we would go above ten percent. It’s a regulatory issue,» he told «Reuters.»

Khudairy made similar comments in October when he said «We like where we are at 9.9 percent. At this stage, we’re not interested in moving from a tactical shareholder into a different category in terms of our relationship with Credit Suisse,» as finews.com reported. But repeating that sentiment was more than enough to prompt the selloff of Credit Suisse in jittery markets.

Finma Also Contacted

Credit Suisse also asked the Swiss Financial Market Supervisory Authority (Finma) for a similar response, according to the story which cited two sources familiar with the matter. Neither institution has yet decided to intervene publicly, it said. Finma has not yet responded to an inquiry from finews.asia.

Also, the European Central Bank (ECB) has instructed lenders in the EU to disclose their exposure to Credit Suisse. The ECB is said to have discussed the pros and cons of making a public statement on the situation but decided not to, fearing adding fuel to the panic, according to the «FT» citing people familiar. 

Credit Suisse's market capitalization slipped below 7 billion francs. A few months ago, CS had raised 4 billion francs in new capital.