Credit Suisse wants to continue its restructuring with a huge loan from the central bank, but the hypothesis of a takeover of the banking giant is resurfacing, fueled by a market capitalization of less than 10 billion francs.
The second Swiss bank suffered the worst session in its history on the stock market on Wednesday, pushing the central bank to come to its rescue by making available up to 50 billion francs of liquidity (50.8 billion euros) to reassure investors. markets. The title recovered on Thursday, also helped by the central bank which insisted that there is no risk of contagion between the difficulties of certain banks in the United States and the Swiss financial market.
In detail, the action of the bank rebounded more than 32% at the opening on Thursday, after having lost up to 30% the day before. It closed the session up 19.15% at 2.022 Swiss francs. Ulrich Körner, the boss of Credit Suisse considered “decisive” the measures announced in the middle of the night in Europe and assured that “the bank continues (its) strategic transformation”.
The Zurich establishment is one of the thirty global banks considered too important to let them fail and must therefore have adequate reserves to face a crisis.
Faced with a series of scandals that have weakened the bank, the management launched a major restructuring in October which plans to separate the investment bank from the rest of its activities in order to refocus on wealth management, asset management and on the Swiss branch, active in retail banking and loans to SMEs.
But the bank continued to accumulate setbacks. As early as February, it said it expected a “substantial” pre-tax loss for 2023 even though it revealed a net loss of 7.3 billion francs for 2022. It also suffered massive withdrawals of money from its customers which amounted to 110.5 billion francs in the fourth quarter.
Attentive investors
For Christian Schmidiger, analyst at the cantonal bank of Zurich, the question is now to know what will be the effects of the aid of the SNB “on the reflux of capital”. In fact, investors are impatient to see the bank put its affairs in order.
“Every bad news counts double,” said Baader Helvea analyst Dieter Hein in a stock commentary, as the stock became highly volatile in the face of mounting setbacks. According to Vontobel analyst Andreas Venditti, the central bank’s help is “a strong signal” which he hopes will “calm the markets and stop the negative spiral”. “However, it will take time to fully regain confidence,” he judges.
For analysts at the American bank JP Morgan, the question is not about Credit Suisse’s capital – far above regulatory requirements – but about “market confidence”, faced with a “complex restructuring” of the investment bank. and capital withdrawals. “The status quo is no longer an option,” they say. The American bank’s analysts are considering several scenarios, including a “complete closure” of investment banking activities or a takeover by another bank, “with UBS as a possible option”.