The news follows a day in which the value of the shares of the Zurich-based bank fell by more than 25 percent.
Swiss bank Credit Suisse has said it will move to shore up its finances, borrowing up to $54 billion from the central bank after its shares plunged, dragging down other major European lenders in the wake of bank failures in the United States.
Credit Suisse said on Thursday it would exercise an option to borrow up to 50 billion francs ($53.7 billion) from the central bank.
“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs,” the bank said.
Fanning new fears about the health of financial institutions following the recent collapse of Silicon Valley Bank and Signature Bank in the US at one point, Credit Suisse shares lost more than a quarter of their value on Wednesday.
The share price hit a record low after the bank's biggest shareholder - the Saudi National Bank - told news outlets that it would not put more money into the Swiss lender, which was beset by problems long before the US banks collapsed.
READ MORE: What's causing the Credit Suisse scare and the drop in global stocks?
The Saudi bank is seeking to avoid regulations that kick in with a stake above 10%, having invested some 1.5 billion Swiss francs to acquire a holding just under that threshold.
The turmoil prompted an automatic pause in trading of Credit Suisse shares on the Swiss market and sent shares of other European banks tumbling, some by double digits.
Speaking on Wednesday at a financial conference in the Saudi capital of Riyadh, Credit Suisse Chairman Axel Lehmann defended the bank, saying, “We already took the medicine” to reduce risks.
When asked if he would rule out government assistance in the future, he said: “That’s not a topic. ... We are regulated. We have strong capital ratios, very strong balance sheet. We are all hands on deck, so that’s not a topic whatsoever".
Switzerland’s central bank announced late on Wednesday that it was prepared to act, saying it would support Credit Suisse if needed.
A statement from the bank did not specify whether the support would come in the form of cash or loans or other assistance. The regulators said they believed the bank had enough money to meet its obligations.
A day earlier, Credit Suisse reported that managers had identified “material weaknesses” in the bank’s internal controls on financial reporting as of the end of last year.
Credit Suisse Group announces public tender offers for debt securities and takes decisive action to further strengthen liquidity. All details available here: https://t.co/S9v2JAiCuw pic.twitter.com/71qZcZsM9W— Credit Suisse (@CreditSuisse) March 16, 2023
Credit Suisse stock dropped about 30%, to about 1.6 Swiss francs ($1.73), before clawing back to a 24% loss at 1.70 francs ($1.83) at the close of trading on the SIX stock exchange. At its lowest, the price was down more than 85% from February 2021.
After the joint announcement from the Swiss National Bank and the Swiss financial markets regulator, the shares also made up some ground on Wall Street.
The stock has suffered a long, sustained decline: In 2007, the bank's shares traded at more than 80 francs ($86.71) each.
Shares in US markets were mixed on Wednesday, with the Nasdaq composite edging 0.1% higher while the S&P 500 dropped 0.7%. The Dow Jones Industrial Average ended 0.9% lower after logging bigger losses early in the session.
Japanese banks resumed their downtrend, with Resona Holdings, the nation's No. 5 bank, falling 5% while other major banks fell more than 3%.
The turbulence came a day ahead of a meeting by the European Central Bank.
In an annual report released Tuesday, Credit Suisse said customer deposits fell 41%, or by 159.6 billion francs ($172.1 billion), at the end of last year compared with a year earlier.