C Suisse should cut securities unit by 15%

Meat Header

'All market participants, analysts and investors, would welcome an investment-bank restructuring beyond what has been announced so far'.

Credit Suisse CEO Brady Dougan could take a lesson from UBS as he seeks to boost his company’s stock: scale down the investment bank.

Bloomberg reports that shares of Credit Suisse are valued lower than UBS’s, and the gap has widened since UBS decided in 2012 to exit most debt trading, according to data compiled by Bloomberg. UBS has a market value 52% higher than Credit Suisse, even as analysts estimate it will earn only 7.6% more next year.

Dougan needs to cut Credit Suisse’s dependence on the investment bank’s fixed-income business, which is volatile and lacks scale, said Kian Abouhossein, an analyst at JPMorgan. He also said the securities unit, which had 19,700 employees at the end of last year, 100 more than at the end of 2008, should cut its workforce by about 15%.

'All market participants, analysts and investors, would welcome an investment-bank restructuring beyond what has been announced so far', Abouhossein said in a telephone interview last week after cutting his recommendation on Credit Suisse shares to underweight from neutral.

To access the complete Bloomberg article hit the link below:

Credit Suisse Returns Lag as Dougan Keeps Debt Trading

Citigroup Shares Rise as Profit, Revenue Beat Estimates 

Best place to workThe Best Firm of the Last Decade is...

Register for Financial Markets News Alerts