Concerns about lacking capital at Credit Suisse persists, this time with Goldman Sachs estimating a gap as high as $8 billion in 2024.

Credit Suisse faces a capital gap of between 4 billion Swiss francs ($4 billion) and 8 billion francs, according to a note by Goldman Sachs analysts led by Chris Hallam.

«Credit Suisse continues to face cyclical and structural challenges,» the note said which maintained a 'sell' recommendation, adding that it would be «prudent» for the bank to raise capital.

Credit Suisse is two weeks away from unveiling its strategic review with the spotlight placed on a variety of issues, most notably questions about how the bank will fund its investment bank restructuring, in addition to the sale of assets like its securitized products group.

Jefferies, Deutsche Bank

Goldman is not alone in highlighting concerns about insufficient capital with Jefferies analyst Flora Bocahut adding in a note that Credit Suisse needed about 9 billion francs of capital over the next 2-3 years. Bocahut expects the bank to prioritize asset disposals due to the dilutive nature of a capital increase. 

Separately, Deutsche Bank said in August that Credit Suisse faced a capital gap of at least 4 billion Swiss francs to improve its financial health.

Financial Health Still Strong

While there are looming concerns about the capital gap, numerous banks have maintained that Credit Suisse's current financial state remained strong despite a sharp recent spike in its credit default swap spread to 355 basis points last week. 

According to a note by JPMorgan analyst Kian Abouhossein, Credit Suisse’s financial position in end-June was «healthy» with a common equity tier-1 ratio of 13.5 percent and a liquidity coverage ratio of 191 percent. And Citigroup analyst Andrew Coombs echoed the sentiments and warned against making comparisons to the global financial crisis or Deutsche Bank’s sharp bond sell-off in 2016.

«We would be wary of drawing parallels with banks in 2008 or Deutsche Bank in 2016,» Coombs said, noting that Credit Suisse’s capital ratio is relatively higher compared with peers. «The market appears to be pricing in a highly dilutive capital raise. We do not think this is a foregone conclusion, so would argue Credit Suisse is a buy for the brave at these levels.»