ADVERTISEMENT

Credit Suisse Shares Fall as Analysts Fear Leadership Vacuum

Credit Suisse Shares Fall as Analysts Fear Leadership Vacuum

Credit Suisse shares fell after the Swiss bank ousted its chairman, leaving a number of analysts questioning the bank’s leadership.

The shares slid as much as 2.2% in Zurich, among the worst performers on the Stoxx 600 Financial Services Index. That trimmed its year-to-date gain to 5.2%, trailing the Stoxx 600 Bank Index’s gain of more than 10%.

The departure of Antonio Horta-Osorio “leaves Credit Suisse with a lack of strong characters at the top and leadership questions will likely be raised,” Citigroup analyst Andrew Coombs wrote in a note.

Horta-Osorio was replaced by Axel P. Lehmann, a Credit Suisse board member who oversees the risk committee but is little known outside Zurich.

Credit Suisse Shares Fall as Analysts Fear Leadership Vacuum

Here are more comments from analysts:

Citigroup, Andrew Coombs (buy)

  • “We expect Axel Lehmann to adopt a more traditional chairman approach, with less day-to-day involvement in the running of the bank.”
  • “In the medium-term we do wonder if the focus on growth over capital return and revenue growth over cost saves may be revisited.”

JPMorgan, Kian Abouhossein (underweight)

  • The chairman’s exit is “another negative”
  • “We believe these issues at Credit Suisse are going to lead to ongoing scrutiny by regulators, group risk aversion and hence implied cost of equity will likely stay high.”
  • “Axel Lehmann in our view has a well-established profile in Switzerland and he along with the CEO is likely to continue working on improving the risk culture.”

Keefe, Bruyette & Woods, Tom Hallett (underperform)

  • “Another change at the top in such a short space of time naturally raises question marks around the new strategy and other potential changes to management.”
  • “We believe other than some tweaks, nothing major is likely to change to the strategy in the short-medium term.”

©2022 Bloomberg L.P.