Credit Suisse was on course to shed a quarter of its value Wednesday after its largest shareholder said it could not provide any more support, pushing the Swiss bank's CEO to make new assurances on its financial strength.

Saudi National Bank (SNB), which holds 9.88% of Credit Suisse, said it would not buy more shares in the Swiss bank on regulatory grounds.

"We cannot because we would go above 10%. It’s a regulatory issue," SNB chairman Ammar Al Khudairy told Reuters.

The Swiss bank's shares were down about 24% early afternoon on Wednesday, after hitting a new record low. The stock was pummeled earlier in the week in the market fallout from the collapse of U.S. tech lender Silicon Valley Bank.

In the U.S., shares of Credit Suisse Group (CS) were down 16.25% as of 10:37 a.m. EST to $2.09.

CEO Ulrich Koerner moved to calm nerves, saying Credit Suisse's liquidity base remained strong and was well above all regulatory requirements.

Koerner had said earlier in the week Credit Suisse's liquidity coverage ratio averaged 150% in the first quarter of this year.

The Swiss National Bank declined to comment on Credit Suisse's stock move.

Exane analysts said they saw a bailout by the Swiss National Bank and financial regulator Finma, possibly with one or more other banks, as the "most likely scenario" facing Credit Suisse.

The analysts also said Saudi National Bank could do a u-turn.

Saudi National Bank increased its stake in Credit Suisse last year and committed to investing up to 1.5 billion Swiss francs ($1.5 billion).

BROAD-BASED SELL-OFF

Credit Suisse's plunging stock price has re-ignited jitters among investors about the resilience of the global banking system after the collapse of Silicon Valley Bank.

"The sell-off in the banks now is broad-based which suggests to me that there has to be some kind of game-changing decisive action to reverse and stabilize the situation," the Exane analysts said in their note.

Ralph Hamers, CEO of Swiss rival UBS, speaking at a Morgan Stanley conference on Wednesday, said UBS had benefited from recent market turmoil and seen money inflows.

"In the last couple of days as you might expect we've seen inflows," Hamers said. "It is clearly a flight to safety from that perspective, but I think three days don't make a trend."

Credit Suisse on Tuesday published its annual report for 2022, which said the bank had identified "material weaknesses" in controls over financial reporting and not yet stemmed customer outflows.

Switzerland's second-biggest bank is seeking to recover from a string of scandals that have undermined the confidence of investors and clients. Customer outflows in the fourth quarter rose to more than 110 billion Swiss francs ($120 billion).

The shares fell below 2 Swiss francs for the first time in Zurich as they headed for a seventh straight daily decline.

The cost of insuring the company's bonds against default shot up. Five-year credit default swaps on Credit Suisse debt widened to 574 basis points from 549 bps at last close, based on data from S&P Global Market Intelligence, marking a new record high.

($1 = 0.9173 Swiss francs)