Credit Suisse Merger - Crazy Rumour ?

10 years ago

Credit Suisse is going through hard times. Its chief executive, Lukas Muhlemann, is coming under pressure to step down and has now been stripped of his role as group chairman. Its shares have been falling and it has had to inject millions of pounds into both CSFB, its investment bank, and Winterthur Life, its insurance subsidiary, to stem losses. Its shares, however, rose around 3% earlier in the week as rumours swirled around the markets that Deutsche Bank may well be thinking of making a bid.

A merger between the two European banking giants has been thought likely in the past. Credit Suisse would like to get its hands on Deutsche's larger client base. Deutsche would be pleased to be able to leverage off Credit Suisse's better quality private banking base.

Sentiment in the market is, however, mixed. Some analysts think that a deal does make sense, whilst others feel that the timing is just wrong and that a merger was most unlikely at present.

New Deutsche chief executive officer, Josef Ackermann, appears to have ruled out a move for anyone for the time being as he focuses on cutting costs and the bank's ambitious share buy-back program.

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