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Credit Suisse Group AG ADR CS

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

We Allocate a Poor Capital Allocation Rating to Credit Suisse

Johann Scholtz, CFA Equity Analyst

Analyst Note

| Johann Scholtz, CFA |

We believe Credit Suisse has been a Poor capital allocator. We agree with Credit Suisse’s broad strategy to shift capital to its more profitable and less cyclical wealth management business, away from capital-intensive and volatile investment banking. The execution of this strategy has been abysmal. It is virtually impossible for a bank to successfully allocate capital in an environment where risk management has broken down. The additional investment in risk management from Credit Suisse is much needed, but it could potentially divert resources away from investments required to maintain Credit Suisse’s competitive position. Investment banking and wealth management are talent businesses, and banks need to invest in their staff. Credit Suisse runs the risk of losing its top bankers and relationship managers to rivals if these employees become dissatisfied with a lack of investment in them.

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Company Profile

Business Description

Credit Suisse runs a global wealth management business, a global investment bank and is one of the two dominant Swiss retail and commercial banks. Geographically its business is tilted toward Europe and the Asia-Pacific.

Contact
Paradeplatz 8
Zurich, 8001, Switzerland
T +41 443336607
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 49,240

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