Credit Suisse Takeover Fears Can Be a Good Thing
A deal would impose much-needed cultural change on the Swiss bank. The challenge would be to find management to take on such a complex integration.
Too big to merge?
Photographer: Stefan Wermuth/BloombergCredit Suisse Group AG’s franchise has proved indestructible through one crisis after another for decades. Its latest mess looks particularly bad. The Swiss bank faces parallel calamities in investment banking and asset management with the same cause — poor risk control — at a time its rivals are performing well. The case for a takeover is strong in principle. The list of realistic buyers is short.
Executives fear a hostile bid or activist assault, Reuters reported on June 25. So they should. A deal could make sense for shareholders and regulators by imposing stronger management on an entrepreneurial culture that has a tendency to drift into freewheeling. The latest examples are the $5.5 billion of losses tied to the collapse of family office Archegos Capital Management and client losses in asset management on exposure to Greensill Capital’s failed supply-chain finance operation.