Thomas Gottstein’s speech on Thursday was more eagerly awaited than expected. The CEO of Credit Suisse was due to speak at a conference in Rome organized by the US bank Goldman Sachs. But less has been said about the new earnings warning, which disappointed investors on Wednesday. Rather on a rumor that bounced the action at the end of the day.
According to the financial blog InsideParadeplatz, the Swiss bank, which has been shaken by business for several months, could be the subject of a takeover bid by US asset management giant State Street. The latter, according to the site, which cites an anonymous source, could offer 9 francs per share (6.70 francs at the current rate, down 3.7% this morning).
“We never comment on rumors,” Thomas Gottstein said. My father once gave me some advice: for really stupid questions, it’s best not to comment at all. In that case, I will follow my father’s advice. ”
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Listed in New York, State Street, which did not comment on the information, lost more than 5% yesterday. Managing $ 4 trillion and with more than $ 40 trillion in managed or deposited funds, the Boston-based group has some 40,000 employees, compared to just over $ 50,000 for Credit Suisse. Its stock market valuation is just over $ 25 billion, compared to 18.5 billion francs for Credit Suisse (about $ 19 billion). The latter would become a subsidiary of the US group and would focus on wealth management and operations in Switzerland. The future of business banking is yet to be discussed.
Reconciliation, however, is seen as unlikely, according to most analysts. “I look forward to hearing from Thomas Gottstein. But I remain skeptical and believe that Credit Suisse must solve its problems and regain the confidence of its stakeholders in the coming years, ”Andreas Venditti, an analyst at Vontobel, said in a note on Thursday morning.
According to several experts quoted by Bloomberg, another transaction could be considered: the transfer of Credit Suisse’s asset management to State Street, which may want to continue to grow by acquisition. Last year, Credit Suisse considered making it a separate entity from the bank but then gave it up. It is one of the bank’s four key divisions, Thomas Gottstein repeated on Thursday.
Also read: Credit Suisse expects a third straight quarterly loss
On Wednesday, the Swiss bank warned that a loss would be likely in the second quarter. This is the third warning about the consecutive results of the institution that is accumulating difficulties. Its stock has lost half its value since the Greensill and Archegos scandals in early 2021. This is not the first time Credit Suisse has been the subject of rumors of a buyout or merger. Several names have already circulated, including UBS. There is reportedly a plan to reconcile the two Swiss giants in 2020.
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