Shares in Credit Suisse, which has big presence in Triangle, drop on financial worries

MORRISVILLE – Shares in financial giant Credit Suisse, which has a big presence in the Triangle at a technology center where it wants to hire more than 100 people, plunged 10% over the weekend as concerns about the Swiss-based firm’s financial health grow.

In a blunt headline, CNBC declared: “Credit Suisse shares tank 10% on restructuring, capital concerns.”

Early Monday, shares were down more than 6% at $3.68.

The drop came despite efforts by management to soothe concerns, CBNC, The Financial Times and Reuters reported.

Last week, Credit Suisse (NYSE: CS) declared in a statement that “it is well on track with its comprehensive strategic review including potential divestitures and asset sales. The bank will update the market further when it reports third-quarter results on October 27, 2022.”

“The bank is currently executing on a number of strategic initiatives including potential divestitures and asset sales,” it added.

Credit Suisse

On Sunday, a bank spokesperson told CNBC it would not comment about the stories until Oct. 27 when it reports financial results.

“It would be premature to comment on any potential outcomes before then,” the bank said in a statement to CNBC.

Reuters noted that Credit Suisse executives “made the calls after spreads Credit Suisse credit default swaps (CDS), which offer protection against a company defaulting, rose sharply on Friday in an indication of investor concerns.” Reuters cited Financial Times reporting.

The latest concerns come after CEO Thomas Gottstein resigned in July after 2-1/2 years in the job, as he announced “disappointing” results, plunging revenues and a net loss in the second quarter.

The financial services firm opened a new $100 million building at its RTP campus in 2019 as part of a 1,200 jobs in RTP announced in 2017. But that expansion only moved ahead after  North Carolina General Assembly passed a bill repealing House Bill 2 known as the “bathroom bill.”

CEO at struggling Credit Suisse, which has tech hub in RTP, resigns

The drop in share price Monday came on top of a decline that has dropped value by 60%, CNBC noted.

But in a memo to staff as reported by CNBC, Credit Suisse’s top executive said: “I trust that you are not confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank.”

Headlines in other media pointed to Credit Suisse management efforts to calm concerns:

The bank’s statement

Here is the text of what Credit Suisse said on Sept. 26:

“While there has been a heightened level of media and market speculation about the potential outcome over the past days, the bank is committed to providing further details on the progress of the strategic review, including measures to strengthen the wealth management franchise, transform the Investment Bank into a capital-light, advisory-led Banking business and more focused Markets business, evaluate strategic options for the Securitized Products business, which includes attracting third-party capital, as well as reduce the Group’s absolute cost base to below CHF 15.5 bn in the medium term, as stated on July 27, 2022.

“The Board of Directors and the Executive Board are considering alternatives that go beyond the conclusions of last year’s strategic review. The aim is to create a more focused, agile Group with a significantly lower absolute cost base, capable of delivering sustainable returns for all stakeholders and first-class service to clients.

“The bank is currently executing on a number of strategic initiatives including potential divestitures and asset sales.”

Credit Suisse opens new building in RTP as part of $100M, 1,200 new job expansion