Credit Suisse investor loses faith in cash flow management | – #Credit #Suisse #investor #loses #faith #cash #flow #management
Zurich, 10 February (Reuters) – Credit Suisse’s ( CSGN.S ) senior management has lost investors’ confidence after it discovered cash outflows were continuing despite signaling they were stabilizing, one of Germany’s top investment managers told Reuters on Friday.
367 billion euro (391.77 billion dollars) assets under management, Deka Investment said it was worried investors would continue to pull money from Switzerland’s second-largest bank.
“Constant outflows are frightening,” said Andreas Thomae, Deka’s corporate governance specialist. “That absolutely has to change.”
Thomae said investors were particularly disappointed by the continued pullback after Credit Suisse CEO Ulrich Koerner and Chairman Axel Lehmann said the situation had stabilized.
“And then we learn that outflows have slowed but are continuing,” Thomae told Reuters. “Unfortunately, the company’s top management has lost confidence among investors as a result.”
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Deka, which is owned by Germany’s unlisted savings banks, has a 0.02% stake in Credit Suisse, according to Refinitiv data. Investment is mainly in the form of indexed funds.
Shares of Credit Suisse rebounded on Friday, gaining about 4% after losing about 15% on Thursday as shareholders feared results described by one shareholder as “catastrophic.”
Bank also 110 in the fourth quarter billion More than the Swiss franc abroad funds has seen a sharp acceleration in output, although the picture is improving.
Bank Vontobel analyst Andreas Venditti said many questions still remain open, leading to investor uncertainty.
“How soon will CS recover from the big damage it did last year? “The market is still interested in what the risk/return profile of New Credit Suisse will look like,” Venditti said.
In another sign of market uncertainty, the cost of insuring Credit Suisse debt rose 24 basis points (bps) on Friday to close at 320 bps on Thursday, data from S&P Global Market Intelligence showed.
Ratings agencies said Credit Suisse had gained “some momentum” in its restructuring, including shedding non-core assets and cutting costs, but faced significant risks ahead.
Credit Suisse’s ratings will also come under pressure if the wealth management franchise suffers long-term losses, said Fitch, which has a negative outlook on the bank.
Fitch said the bank’s assets under management should recover, but it cannot afford a halt to its restructuring plan or further weakening of its financial performance.
Moody’s, which rates Credit Suisse two notches higher, expects the lender to post bigger losses in 2023 due to reduced revenue streams and restructuring costs.
The agency expects moderate losses in 2024 before the bank returns to modest profitability in 2025.
Moody’s said on Friday that Credit Suisse’s turnaround plan, which aims to shift its focus away from investment banking and into less volatile wealth management, is “significant due to its scope and complexity.” execution bears the risk.
“However, the plan may be positive in the long run and significantly de-risked freecan lead to a more efficient and simplified bank,” he said.
($1 = 0.9368 euros)
Reporting by Oliver Hirt and John Revill Editing by Louise Heavens
Our standards: Thomson Reuters Trust Principles.
2023-02-10 23:12:31
Source – reuters
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