Credit Suisse is the second largest bank in the Confederation and one of the twenty largest asset managers in the world, with 1,614 billion francs in assets under management. The establishment was severely shaken by the financial crisis of 2008 – a little less however than the rival UBS – and its consequences, in particular the work of undermining bank secrecy. Over the last decade, strategic initiatives have followed one another to reduce costs and simplify the organization. But it is clear that the objectives have been regularly revised downwards, while the stock market sank: -25% over one year, -50% over 5 years and -71% over 10 years. The worst performance of the top 50 Swiss companies.
Credit Suisse’s ambitions in insurance ended in failure (Winterthur, bought in 1997, was sold to Axa in 2006), while its expansion into investment banking earned it its recurring presence in the scandals page financial. To top it off, the establishment had to separate at the beginning of the year from its new Mr. Clean, Antonio Horta-Osorio, who resigned after nine months of presence for having twice violated the Swiss quarantine rules during the pandemic, with the help of a private jet. Not so clean after all.
Valuation and confidence on the floor
At the stock market level, Credit Suisse has rather low ratios. But on the one hand we know why given the recent pans, and on the other hand a low valuation at a European bank has not necessarily been a guarantee of potential in recent years. In addition, revenue growth is rather sluggish, analysts note, while costs are trending higher. The file suffers from the comparison with UBS.
Good connoisseurs of the sector point out that the bank with the three keys (UBS therefore, Credit Suisse, these are the two veils) was forced to reinvent itself after being saved by public money during the subprime crisis. Unlike Credit Suisse, which refused the outstretched hand of the Confederation to turn to the petrodollars of the Middle East (Qatar and Saudi Arabia entered up to ten percent of the capital)… and which escaped scrutiny. In an environment where reputation is the best business card, you will have to take out the oars to accompany the two sails before you can dock.
This is probably a valid explanation, along with a flagrant lack of control. For a house of this size to accumulate business, it is because the top management is deficient and is unable to contain its troops. The arrival of Axel Lehmann at the presidency, an experienced leader from the Swiss financial seraglio, could make it possible to reverse the trend. But this is not the first time that the fable of a return to better fortune has been served up to shareholders. It takes a little more to convince them. The proof ? Over one year, the action lost 28%, while the STOXX Europe 600 Bank gained 10%.
To find out more about Crédit Suisse, I warmly recommend that you read the superb investigation “How Crédit Suisse lost control” by Mathilde Farine, assisted by Duc-Quang Nguyen, Xavier Filliez, Lionel Rousseau and César Greppin in Le Time.
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