Updated: Dec 7, 2022
🏦 Not long ago we wrote about the best and worst European banks and what to expect from them. Today we will focus on the most notorious of them - Credit Suisse.
👉 It was previously reported that the company wants to spin off its two divisions (investment and consulting) into separate companies.
💰 Also Credit Suisse plans to revive First Boston, an investment bank, which was bought out in 1990. To do so, it is expected to raise about $1 billion. The Crown Prince of Saudi Arabia is reportedly already willing to invest half of that amount.
🧐 Now for the financials: let's highlight the pros and cons of Credit Suisse
📌 Value, Rank: 88% out of 100%.
🔹 The bank is cheaply valued by major ratios (P/S is 1.1). However, this is directly related to low investor expectations. Credit Suisse has become unprofitable, so the stock price has fallen a lot this year.
📌 Financial position, Rank: 24%.
🔸 The liability/asset ratio is 94%, the bank is unprofitable, and asset turnover is only 2%, indicating serious problems. Raising additional funds would help to improve it.
📌 Growth, Rank: 2%
🔸 The Ranks system gives a very low rating due to a significant deterioration in the dynamics of key financial indicators. Assets fell by 18% and capital expenditures, on the contrary, rose by 12%.
📌 Forecasts, Rank: 24%.
🔸 Analysts have a mostly negative view of the stock. Not a single recommendation to buy, most of them with a "Hold" rating. No wonder, as the current state of the bank is more than tough.
💬 To summarize:
▪️ Credit Suisse is trying to save the situation, a number of important and strategic decisions have been made in recent months. The bank is in active search for investors, significant steps have been made in this direction.
▪️ At the moment the financial aspect of Credit Suisse looks very weak, the final Rank 22%
❓In 2008, Credit Suisse stock was worth $70, and now it's worth about $3. Which bank do you think could repeat this fate?