Switzerland

Credit Suisse’s fuzzy Apollo deal better than none

15 Nov 2022

Boss Ulrich Körner is offloading $55 bln of assets in a securitised product unit, chiefly to the U.S. behemoth. Credit Suisse did not reveal the price, and it will pay Apollo to manage the remaining assets. But at least Körner avoided selling at a discount amid tricky markets.

How Credit Suisse’s turnaround could work

10 Nov 2022

CEO Ulrich Körner is raising $4 bln of fresh equity and shrinking the Zurich-based group’s trading business to put it on a steadier footing. In this Viewsroom podcast, Breakingviews columnists debate the merits of the plan and what’s at stake if it fails.

Saudi Credit Suisse deal is fair Buffett imitation

2 Nov 2022

The kingdom’s biggest lender is ponying up $1.4 bln to help the weak bank raise capital. It’s not getting the sweet terms the Sage of Omaha extracted from Goldman in 2008 but the returns are still in his ballpark. And if Credit Suisse struggles, a breakup may limit the downside.

Michael Klein’s fourth act may be his toughest

28 Oct 2022

The former Citigroup rainmaker who went solo and then launched $5 bln of SPACs is now set to run Credit Suisse’s advisory unit. It’s odd for a director to parachute into the C-suite, but the bank had no better pick. The bigger issue is CS First Boston’s clunky ties to its parent.

Credit Suisse begins perilous ride to right place

27 Oct 2022

CEO Ulrich Körner will raise $4 bln of capital to finance redundancies and a halving of the investment bank. After several botched strategies, Credit Suisse is now pointing in the correct direction. But ongoing heavy losses, and low 2025 targets, imply a messy few years ahead.

If Credit Suisse loves its bankers, set them free

21 Oct 2022

The Swiss bank may bring outside investors into its dealmaking unit, to insulate it from parental turmoil. The business could be worth up to $6 bln, valued in line with boutique advisory shops. Yet the best way to hit such a price tag is for Credit Suisse to cut it loose.

Credit Suisse legal tab is wildcard for investors

17 Oct 2022

The bank settled an old mortgage case without having to set more money aside. But the bill for future litigation, up to $1.6 bln on its own estimates, will erode earnings. The risk for investors in a looming rights issue is that further nasties bog down the bank’s restructuring.

Financial hubs’ neutrality is all at sea

11 Oct 2022

Switzerland and Singapore are taking the West’s side in the Ukraine war. Now fear is rising that Hong Kong will become a Russian stomping ground after an oligarch’s yacht docked there. That’s overdone, but the impartiality of rich centres is increasingly likely to create waves.

Credit Suisse’s debt move is largely reassuring

7 Oct 2022

The lender is buying back $3 bln of bonds, a way to remind credit markets of its cash mountain. Having to reassure on liquidity is hardly ideal, but Credit Suisse’s cost of insuring against default fell. For shareholders, it also flags the bank has creative ways to boost capital.

Credit Suisse can stop rot with $5 bln cash call

5 Oct 2022

Heavy investment-bank losses and higher funding costs risk damaging the Swiss group’s core wealth unit. Chair Axel Lehmann can draw a line by ditching debt trading and slashing costs. To shrink he needs more capital. Asking investors for equity is cleaner than tricky asset sales.

Abu Dhabi would be a logical owner for Gunvor

4 Oct 2022

ADNOC, the emirate’s huge oil company, is interested in the privately held commodities trader. Gunvor’s valuation involves guesswork, and it used to be owned by a target of U.S. sanctions. But the UAE could use the group’s roster of gas client relationships, and it has the cash.

Credit Suisse selloff throws wrench into revamp

3 Oct 2022

The bank’s shares fell 8% on Monday and the cost of insuring its debt soared. Chair Axel Lehmann may struggle to sell assets amid the turmoil, undermining a strategic overhaul. A sustained rout could even force him to raise capital fast – at a painful valuation for shareholders.

Richemont finds tolerable way to refocus

24 Aug 2022

The $60 bln Cartier owner has finally sold part of e-commerce unit YNAP to Farfetch. Richemont gets a lower price than it could have last year, but keeps online presence via payment in its U.S.-listed rival’s shares. And cutting its stake helps it focus on more promising sectors.

Banks’ LBO debt hangover may leave lasting scars

16 Aug 2022

Dicey markets forced Goldman Sachs and peers to take a hit on $80 bln of buyout loans that got stuck on their balance sheets. Calmer conditions mean the worst may be over. But the trauma, along with rising rates and competition from private lenders, adds to the case for job cuts.

Richemont’s governance armour is hard to pierce

12 Aug 2022

Activist Bluebell wants ordinary investors to appoint their own director on the board of the $63 bln Cartier owner. Yet Chair Johann Rupert’s big voting power means he could stifle the attempt. Without a fresh voice, contrarian business ideas may not get much airtime.

Credit Suisse revamp risks being bad copy of UBS

27 Jul 2022

Like its rival in 2012, the $14 bln group is shrinking its trading businesses and cutting costs to focus on wealth management. Yet heavy losses and dicey markets will constrain new CEO Ulrich Koerner, who has never run an investment bank. A respectable valuation may take longer.

Next Credit Suisse CEO’s focus: costs and capital

26 Jul 2022

Thomas Gottstein will soon leave the $14 bln bank, the Wall Street Journal reported. A lack of internal candidates and the need for a strategic rethink argue for a heavyweight outsider. The first job will be to shrink debt trading, a costly effort that may require fresh equity.

UBS’s growth dip cements discount to U.S. rivals

26 Jul 2022

Shares in Ralph Hamers’ $50 bln bank fell 6% after wealthy clients all but stopped investing new money in the second quarter. It’s a setback for his strategy, which rests on boosting revenue. Reversing the trend is key to earning a valuation multiple closer to Morgan Stanley’s.

China gives Zurich exchange a financial panda

25 Jul 2022

Four companies from the People's Republic are seeking to raise $2.4 bln via a new link with the Swiss hub. With U.S. regulators ready to delist Chinese firms, Beijing is expanding European bourse tie-ups. As with London, there will be fanfare, but trading volumes will stay caged.

Benettons swap motorway power for airport clout

11 Jul 2022

The Italian tycoons will exchange their stake in road and airport caterer Autogrill for at least 20% of duty-free player Dufry, without getting a premium. The combined $5.6 bln group is a bet on long-distance travel recovering. Other investors must decide whether to hop on board.