Credit Suisse Reshuffle Makes UBS a Better Bet: Pro

Reuters with CNBC.com

The move by Swiss bank Credit Suisse to dismantle its asset management unit into its private bank is not what the markets were waiting for, according to Rainer Skierka, a senior analyst at Bank Sarasin & Co. Ltd.

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"Today's news looks a little bit like trying to do something to react on competitor's news from UBS two weeks ago without having much to say," he said in a research note.

Skierka left his outlook for Credit Suisse at neutral, adding that the announcement strengthens the investment case for UBS .

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Credit Suisse announced on Tuesday that it has also promoted fixed-income executive Gael de Boissard to co-run its investment bank. Both moves make sense, according to Skierka, and come three weeks after the bank said it would cut an extra 1 billion Swiss francs ($1.1 billion) in costs as part of efforts to bolster its profits and capital position.

But Skierka had expected bigger organizational changes relating to its investment banking arm.

"The strategic reshuffling is a long way from hopes that Credit Suisse would follow UBS in restructuring the (investment bank) and exiting the (fixed income, currency and commodities business)," he told CNBC.

"Market expectations became, however, in the last days somewhat exaggerated and expectations were too high."

Shares in the Swiss bank fell 3 percent on Tuesday as markets reacted badly to the news.

Its Swiss rival announced on November 5 that it was set to transform its investment banking into a value enhancing business. This will stop "capital-intensive, often value-destroying and low-return (investment banking) businesses", according to Skierka.

"In this context it seems that UBS and Credit Suisse are miles away in their strategic mindset," he said.

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Reuters reported that Gael de Boissard will join the Zurich-based bank's top management and jointly head the investment bank with current chief Eric Varvel, who will run equities and the investment banking department, which includes corporate finance.

At the private banking unit, which looks after the financial affairs of wealthy clients, current head Hans-Ulrich Meister will be joined by asset management head Robert Shafir.

Meister will run private banking in Switzerland, Europe the Middle East, Africa, and Asia, as well as all Swiss client businesses.

Shafir will take responsibility for all private banking and asset management operations in the Americas.

"The changes announced today are a stepping-up of our strategy," Credit Suisse chairman Urs Rohner said in a statement.