Credit Suisse's fund outflows may spark M&A talk: JPMorgan

Continued client outflows at Credit Suisse could spark speculation of a takeover of the embattled Swiss bank and may lead to the partial sale of its domestic unit, analysts at JPMorgan said on Thursday (Dec 1).

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 (S$115.1 billion) in wealth management and 107 billion francs in total, compared with 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 per cent this year to record lows, is in the midst of trying to raise 4 billion francs to bolster its finances. REUTERS