Credit Suisse’s fund outflows may spark M&A talk – JPMorgan

This post was originally published on this site

Credit Suisse has reported steep outflows as wealthy clients move assets elsewhere, while the bank battles to recover from a string of scandals by focusing more on its flagship wealth management franchise and pruning back investment banking.

JPMorgan said in a note to clients that it expected fourth-quarter outflows of 80 billion Swiss francs ($85 billion) in wealth management and 107 billion francs in total compared to the 84 billion total for this year as of Nov. 11.

“However, should outflows be ongoing … M&A speculation (is) likely to increase and may lead to an IPO of the CS Schweiz legal entity worth an estimated 14 billion francs, full closure of the investment bank, and retaining wealth management and asset management in the NewCo,” it wrote.

Credit Suisse, whose shares have plunged about 66% this year to record lows, is in the midst of trying to raise 4 billion francs to bolster its finances.

($1 = 0.9429 Swiss francs)