The collapse of the U.S.-based SVB Financial Group has led to jittery financial markets globally. The banking stocks were the worst hit as investors panicked over another major crisis after 2008.
The FTSE 100 index has been down by more than 7% in the last five days. The FTSE 250 fell by 6.2% during the same time.
The FTSE 100 saw a tough day on Wednesday and closed 3.8% down at 7,344.4.
Amid the global banking woes, the news from Swiss giant Credit Suisse Group AG (NYSE:CS) (DE:CSX) added fuel to the fire. The shares of the global investment bank fell strongly on Wednesday after its biggest shareholder, Saudi National Bank (SNB), withdrew further support in the form of financial credit.
The stock suffered a freefall and was down 24% on the Swiss Exchange and was also suspended temporarily.
SNB, which currently owns 9.8% of Credit Suisse, denied such allegations and remains confident in the bank. The Swiss bank, however, admitted “material weaknesses” in its 2002 annual report.
The shares of the banking sector in Europe suffered the aftermath and traded in the red zone.
Lloyds Banking Group (GB:LLOY) was down 4.45%, and HSBC Holdings (GB:HSBA) lost 5.19% yesterday. Similarly, Barclays (GB:BARC) was down almost 9% and NatWest Group (GB:NWG) declined by 5.7%.
The European counterparts were not behind and also faced the heat of this mini-A France-based financial services company, Societe Generale SA (DE:SGE), which was down around 10%.
Germany’s Commerzbank (DE:CBK) and Deutsche Bank AG (DE:DBK) were both down by 10% and 8%, respectively.
Investors remain worried ahead of another possible rate hike by the European Central Bank (ECB) today, despite the chaos in the banking sector.