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Monday, Oct 14
Credit Suisse fixed-income efforts bear fruit, but UBS does better
- "It is hard to be present in every business line in a world where capital is expensive. You have to make some choices," said Credit Suisse (CS +0.8%) executive Gael de Boissard in 2009 as he outlined a strategy to pare back the bank's FICC business.
- Success thus far: Credit Suisse posted a 18% ROE in H1 on 9% higher revenues. The risk is the businesses CS exited will come roaring back and the businesses it exited will slow.
- UBS - has been far more aggressive than the "surgical" efforts of Credit Suisse - gutting much of its fixed-income business and moving to eliminate 10K jobs. The tale is in the stock prices - UBS is ahead by nearly 70% over the last two years vs. 13% for CS. Yet Credit Suisse looks like it's going to be the template for other European and U.S. banks facing the same sort of regulatory pressure.