CREDIT SUISSE: Would have taken over CS long ago...

...if we had just about CHF 25 billion at hand! Where else can you get a supposed Swiss bank "pearl" at a price-to-book ratio of 0.36 (at CHF 6.20) or at a P/B ratio of around 0.50 at a takeover value of CHF 9 per share. Although State Street has denied any interest in buying the company, it is still easy to imagine a takeover at CHF 9 by any interested party. It is unclear which source "Inside Paradeplatz" referred to, or was it even misleading information? Whatever the case may be. If the restructuring is indeed on track, as CREDIT SUISSE CEO Thomas Gottstein announced on June 9, 2022, the bank would be a "bargain" as a takeover candidate. We primarily doubt the progress on the cost side: savings of only CHF 200 million in the current and coming year are rather ridiculous (centralization of IT and procurement). Rather, the "thumbscrews" would have to be tightened on personnel expenses - usually by far the largest cost block that can be influenced. We are repeating ourselves, but do you sense any real fighting spirit, ambition or reason at the top level this time, let alone humility, heart and soul and solidarity? We don't! After the loss year 2021 as well as the 1Q22 loss and the upcoming 2Q22 loss, it would be appropriate vis-à-vis the shareholders to suspend the bonus pot at least for a single year... and already more than CHF 2 billion would be on the credit side from the cost side. Even if the losses mentioned are not frightening, they nevertheless testify to a certain incompetence of individual perpetrators. Unfortunately, it is also common practice at some other banks to (want to) satisfy internal desires first. What we consider very positive is the significant strengthening of the risk culture; an essential factor for more solid times. As announced last Wednesday, the 2Q22 result is again burdened by a loss in volatile Investment Banking. But CREDIT SUISSE is, after all, withdrawing from a number of businesses. One of these is "Prime Services", i.e. the hedge fund business; around 95 percent has been implemented in this regard, and this issue should be concluded by the end of 2Q22.

Despite the lack of "emotional" perception, we believe for the time being in CREDIT SUISSE's future (from 2023) success story. Turnaround situations are always difficult, but it should succeed with the existing large potential. This is certainly made more difficult by the laborious development on the markets, whereby high volatility should actually lead to higher income in the commission business. Or is the fee model perhaps also a problem? We have to leave this question open. Also helping - as is widely rumored everywhere - should be rising interest rates. So there is the light on the horizon. If CS does not manage to finally generate added value even early in 2023, personnel questions must(t) be asked! As announced, we have bought additional shares at CHF 6.18 (June 10); cost price now at CHF 7.57. Target price remains at CHF 12!

CREDIT SUISSE N is listed on the SIX Swiss Exchange under the symbol CSGN, the security number is 1'213'853, last price approx. CHF 5.98.