🏦Saga 4:Credit Suisse Analysis🐻🐻🐂❓
Credit Suisse Saga ⏰-Line:
(1) On 14/3 (Tue):
⚠️ Credit Suisse (CS) released its delayed annual report, which warned of "material weaknesses" to its financial controls🐻🐻
➡️ CS chair Axel P. Lehmann & CEO Ulrich Körner said: “Our financial results for 2022 were significantly affected by the challenging macro and geopolitical environment with market uncertainty and client risk aversion, significant deposit and net asset outflows in the fourth quarter as well as the strategic actions we are taking to build the new Credit Suisse. Net revenues for 2022 decreased by 34% year on year, driven by declines across all of our divisions.”
⚠️ The chairman of Saudi National Bank, CS’s largest shareholder, ruled out further financial intervention in an interview with Bloomberg🐻🐻🐻
⚠️ This comes right after the collapse of 🥇Silvergate Capital 🥈Silicon Valley Bank 🥉Signature Bank in a matter of days🙈🙉🙊
(2) On 15/3 (Wed):
🔥 CS plummeted to a new record 52-Week Low of $1.76📉📉📉 in the latest chapter of the 🏦crisis🥵🔥🥵
🧯🔥 announced offers for senior debt securities for cash of up to 3 billion francs. CS said it had also accelerated cost cuts & well on track to deliver 2.5 billion francs of cost-base reductions by 2025, including 1.2 billion francs in 2023🤔🤨
🧯🧯🔥 The Swiss National Bank (SNB) & the country's financial regulator, FINMA, in a joint statement sought to draw a line under months of speculation about the bank's future that had culminated in a 30% drop in its stock price on 15/3 (Wed).
👍 The agencies confirmed Credit Suisse "meets the higher capital and liquidity requirements applicable to systemically important banks."
👍 "If necessary the SNB will provide CS with liquidity,"
➡️ The move, tantamount to a blank cheque from one of the 🌎's leading central banks, is designed to stem a crisis of confidence in 🇨🇭Switzerland's 2nd-biggest lender resulting from years of scandals & losses. It is 1 step short of a fully-fledged bailout like those seen during the financial crash more than a decade ago.
➡️ 🇨🇭Switzerland's radical pledge to bankroll CS has won the embattled lender the chance to resurrect itself from an almost complete collapse in confidence that rattled global markets.
(3) On 16/3 (Thu):
🚑 In the early hours, CS said it was taking decisive action to strengthen its liquidity by exercising its option to borrow from the Swiss National Bank up to 50 billion Swiss francs ($54 billion) under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralised by high quality assets
🤔Question: Buy, Hold, or Sell❓
👍 CS is 1 of 30 global financial institutions designated as being systemically important by the international Financial Stability Board. In other words, it's very unlikely to fail.
👍 By the numbers: CS had total assets of $574 billion at the end of 2022-down 37% from $912 billion at the end of 2020. Its asset-management arm supervises another $1.7 trillion in assets. Those numbers dwarf anything seen at Silicon Valley Bank, which had total assets of $212 billion.
⚠️ Long troubled, the CS’s problems came to a head last year amid a social media storm of speculation that it could collapse. It has since struggled to recover after customers withdrew about $120 billion in Q4 2022.
⚠️ CS recorded losses the last 5 quarters.
⚠️ Revenue declined in 4 of 5 recent reporting periods.
⚠️ CS trades as American Depositary Receipts, & has declined 68.6% over the past year.
⚠️ But while the SNB funding guarantees the CS’s future, it does little to address the strategic disarray at the group nor its inability to convince investors & clients that it can turn the corner.
⚠️ CS has been seeking to restore profitability by pivoting away from investment banking & trading securities to focus on managing money for the wealthy. This plan rests on CS being able to find backers for the investment banking division it wants to carve out, while being able to grow wealth management. Neither are a given😅
⚠️ The bank saw revenue from trading stocks & bonds slump by 88% in the last 3 months of 2022 from a year earlier, in part because clients moved their business elsewhere as per Reuter’s report.
⚠️ While the SNB lifeline may stop the rout in the bank's shares the bank could nonetheless be forced to look at the sale of businesses such as its Swiss arm or CS might need a break-up.
🤔💭My Thoughts: CS despite being 1 of 30 global financial institutions designated as being systemically important by the international Financial Stability Board, & somewhat a state-🏦 with the backing of SNB, its immediate future is too unpredictable⚡️⛈⛈⛈⚡️& I would stay away from it & probably buy 1 of the other 🏦 with orange arrows above as they so happen to be in the 🌎's Top10 🏦 Brands in my research for another post yesterday😬
$Credit Suisse Group AG(CS)$ $Bank of America(BAC)$ Bearish$Palantir Technologies Inc.(PLTR)$ Bullish$Pinduoduo Inc.(PDD)$ Bullish$NASDAQ(.IXIC)$ Bullish
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Modify on 2023-03-16 22:04
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