Credit Suisse CEO blasts ‘really stupid’ takeover rumor

Not Credit Suisse’s Thomas Gottstein.

When asked at a Goldman Sachs conference Thursday about chatter circulating on Wall Street regarding a possible acquisition of Credit Suisse by the big American bank State Street, Gottstein replied more succinctly.

“As you would expect, we never comment on rumors,” Gottstein said. “And my father once gave me advice: for really stupid questions, you better don’t comment at all. So I think I will listen to my father’s advice.”

Credit Suisse (CS) has been the subject of much takeover speculation due to its recent lousy performance. The stock has fallen about 30% this year and is near a 52-week low.
On Wednesday, the European financial giant warned that it would report a second quarter loss, due largely to volatility created by Russia’s invasion of Ukraine and rising interest rates.
But Credit Suisse also is dealing with massive internal problems. Mounting legal costs tied to litigation from last decade’s mortgage crisis as well as more recent fraud allegations, have hit profits.
Several executives have left the firm or been forced out in the past few years. Most recently, Credit Suisse’s chairman stepped down amidst reports that he broke the company’s own Covid-related travel rules.
The bank also was hit hard by its exposure to the collapsed hedge fund Archegos, which led to a multi-billion dollar loss for Credit Suisse last year.
State Street (STT) was not immediately available for comment about the Credit Suisse merger chatter. But the bank is currently trying to complete its own $3.5 billion deal for the investing services unit of Brown Brothers Harriman, and may not have the bandwidth to take on another acquisition — especially given Credit Suisse’s market valuation of more than $17 billion.

State Street’s stock also has plunged about 25% this year, as market volatility is hurting its massive exchange-traded fund business. State Street’s asset management unit is the sponsor for the popular SPDR family of ETFs.

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