Bloomberg reports that a memo to staff and a call with managing directors did little to assuage concerns about the bank’s slumping share price, which hit a 20-year low on June 14th, according to people familiar with the matter who asked not to be named because they aren’t authorized to speak publicly.
Some employees, disagreeing with Dougan, favor selling new stock even at current levels to put an end to questions about the firm’s capital strength, four senior managers said in interviews this week.
Dougan, who for years has been calling his firm one of the best-capitalized in the world, led Credit Suisse through the 2008 financial crisis without direct state aid, even as its bigger competitor, UBS, got a government bailout.
Four years later, Dougan’s bank faces public criticism reminiscent of UBS during the last crisis amid uncertainty over capital and a U.S. criminal investigation into alleged tax evasion by some American clients. Credit Suisse has dropped 18% this year, while UBS has climbed 2%.
'He’s obviously under a lot of pressure', said Christopher Wheeler, a London-based analyst at Mediobanca SpA who has a neutral rating on Credit Suisse. 'Their capital position looks tenuous. Their profitability is tenuous. It feels like the board may start thinking: ‘Do we need a fresh pair of eyes running this bank at this point in time because something has lost momentum ?.'''
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