State Street has denied that it is in talks to acquire Credit Suisse, rejecting the report that it is pursuing a troubled Zurich-based creditor.
The US custodian bank on Wednesday initially declined to comment on a report from a Swiss blog that it was preparing an offer, which exacerbated the sharp movements in shares of both creditors.
In a statement Thursday, State Street said it was not pursuing an acquisition or other business combination with Credit Suisse. There is no basis for ongoing market rumors. Although we have a long-standing policy of the company not to comment on such speculations, we believe that the answer to these reports is now justified in this case. “
Earlier in the day, Credit Suisse CEO Thomas Gotstein was asked about the report of the Goldman Sachs European Financial Conference in Rome. He replied: “We never comment on rumors. My father once gave me some advice: for really stupid questions, prefer not to comment at all. In this case, I will listen to my father’s advice.
Shares of Credit Suisse fell nearly 6% after the two companies spoke. Shares of State Street jumped shortly after its denial and rose nearly 1% in afternoon trading in New York.
A day earlier, shares of Credit Suisse hit a 30-year low of 6.20 SFr after their third earnings warning in January, but rose after a takeover report on Swiss blog Inside Paradeplatz, ending in positive territory on Wednesday.
Inside Paradeplatz quoted the only source as saying that State Street was bidding SFr9 on Credit Suisse.
Although initially declining to comment, the US lender noted that it is still in the process of finalizing its $ 3.5 billion purchase of the Brown Brothers Harriman’s custody and asset management business. Its shares fell 5.5% on Wednesday, with investors apparently worried it was less than an outright refusal.
Analysts said they saw little benefit from buying Credit Suisse from State Street, but noted the potential for a possible combination of banks’ asset management departments.
State Street Global Advisors specializes in index funds and exchange-traded funds, while Credit Suisse Asset Management focuses on active products with higher margins.
Asked about potential ventures involving CSAM during the Goldman Sachs event, Gotstein said he had no plans and that the asset management business was one of the bank’s four main divisions.
Gotstein was also asked about the bank’s prospects of recovering from losses for three consecutive quarters.
He said the bank is committed to achieving or potentially meeting its 17 billion-franc spending target for the year, and some austerity initiatives will be accelerated, although he added that the bank would not make any concessions on risk and compliance.
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