Credit Suisse is not for sale, chairman Axel Lehmann says

Singapore – Any bargain hunters hoping to snap up Credit Suisse Group, now that the lender’s revamp has pushed its stock down yet again, may find themselves getting short shrift in Zurich.

“We are going to thrive again, so we don’t have any takeover discussions,” Credit Suisse chairman Axel Lehmann said in an interview with Bloomberg Television in Hong Kong on Monday. “We want to stay independent.”

With its share price slumping by more than half this year, the 166-year-old institution has been vulnerable to rumours of takeover bids and concerns over its stability.

Mr Lehmann said the 4 billion Swiss franc (S$5.65 billion) capital increase will make the lender “rock solid”, helping it carry out a vital restructuring that radically downsizes the loss-making investment bank and shrinks its trading operations. 

“Going forward, Credit Suisse is really a wealth management-centric franchise, centred around entrepreneurs, wealthy clients,” said Mr Lehmann, adding that the bank plans to push ahead with growth efforts in key markets in Latin America, the Asia-Pacific region and the Middle East.

The executive is “highly confident” that Credit Suisse can secure an agreement over the next week in relation to the sale of the majority of a securitised-product trading business to a group led by private equity firm Apollo Global Management. The bank plans to retain a stream of revenues from the business, Mr Lehmann said.

On Monday, the bank detailed plans to raise capital through a rights issue and selling shares to investors including Saudi National Bank, which is set to become one of the lender’s top shareholders. To assist with the process, the company announced an enlarged syndicate of banks that includes Wall Street names such as Goldman Sachs., European lenders such as BNP Paribas and Barclays as well as firms in Asia.

Approximately 1.8 billion Swiss francs has been committed by several anchor investors, while the rest of the rights issue is fully underwritten, Mr Lehmann said. 

Following the capital increase announcement, Mr Lehmann himself has bought some US$1 million (S$1.4 million) worth of shares to display confidence in the bank’s strategy, Bloomberg reported on Monday. 

Credit Suisse is also starting initial headcount reductions of 2,700 positions in the fourth quarter, and will ultimately slash the workforce by some 17 per cent, or approximately 9,000 roles. Mr Lehmann declined to elaborate on which regions will be most affected by the job cuts. 

Mr Lehmann was bullish on the growth prospects for the Asia-Pacific region, and pushed back at any suggestion the lender is considering dialling down its commitment to China, given the nation’s growth slump and geopolitical concerns. 

“I think the region really has inherent growth,” said Mr Lehmann, adding that the firm monitors geopolitical tensions carefully. “Hong Kong will continue to play a pre-eminent role as a global financial centre – we are, and we will stay, committed to that.”

The bank’s wealth management arm has now stabilised after what Mr Lehmann called a “social media storm” prompted some investors to pull cash from the bank.

“I would anticipate that we will have further inflows in the weeks and months to come,” he said. “We have a lot of clients that told us they would come back.” Bloomberg