Following the news that despite a solid turnaround plan announced in October 2022, the market has lost confidence in Zurich-headquartered Credit Suisse Group AG;

Andrew Haslip, Lead Wealth Management Analyst at GlobalData, offers his view:

“The US bank run has definitively spread to Europe with Credit Suisse shares plunging in trading and dragging down other major European bank stocks. The market has found its latest victim, but it is not fears of inadequate capital or funding that are driving investors, rather a lack of confidence in Credit Suisse management.

“Private wealth management is suffering across the board, with most private banking units reporting weak numbers in 2022 and expectations that this will continue well into 2023 as central banks battle inflation and recession fears mount. However, Credit Suisse is attracting the investor’s ire for reasons quite separate from the rest of the wealth management.

“Credit Suisse has been singled out by investors not because it has undue links to the US tech sector, or to the US banks at the center of the crisis, nor indeed because it suffers from low capital buffers or a narrow business focus. The current situation reflects the loss of confidence in Credit Suisse’s ability to effectively manage itself.

“Repeated large scandals at the bank over the last few years along with its announcement on 14 March that it had found material weakness in its financial reporting have sapped all confidence in the bank. Until it restores client and investor confidence in its own management, the bank is not truly out of the woods.”