Once again, Switzerland's second-largest bank faces a great deal of speculation. This time the rumor is that the domestic business will be partly sold off. 

Credit Suisse plans to inform the world about its future restructuring plans in less than two weeks when it announces its third-quarter results. However, its reluctance to provide any updates since disclosing second-quarter results earlier this year has allowed rumors to run riot. The latest example is the speculation in the «Financial Times» (paywall), that the troubled bank also wants to sell off parts of its Swiss business.

Without specifying concrete sources, the FT speculates Credit Suisse could sell its consumer credit institution Bank-now or stakes it has in SIX Group, Swisscard, or its Allfunds unit. The report also speculates that the Savoy Hotel on Zurich's Paradeplatz, which the bank has put up for sale, is worth 500 million Swiss francs ($497 million). How the FT arrives at this figure is a mystery insofar as it refers to unnamed «insiders».

Back to Square One?

Credit Suisse never made a secret of the fact there are savings to be had in the Swiss business. The bank reiterated its position to the Swiss news agency «AWP» over the weekend, «We have already said that we will communicate on the progress of our comprehensive strategy review together with the third quarter figures. It would be premature to comment on possible outcomes before that time».

That puts Credit Suisse back to square one back where it was a few weeks ago when it declined to comment on media reports. As a result, the pressure, particularly from Anglo-Saxon media, got to the point where the bank felt compelled to deny or at least try to put to rest some of the speculation, as finews.com reported. 

Investment Banking

Credit Suisse made it pretty clear in July that the focus of its reorganization would be on investment banking. Savings in the Swiss business are expected, but to a limited extent, especially since more far-reaching measures in this area would negatively impact the share price. 

Credit Suisse's top management said over the weekend that the FT headline was simply wrong.

Capital Strength Reaffirmed

Last Friday, Credit Suisse Chairman Axel Lehmann reiterated the bank's capital strength. «This year we are not generating capital because we are not making a profit», he said at an event hosted by the Institute for International Finance.

Lehmann went on to say that Credit Suisse has a core tier 1 (CET1) capital ratio of 13.5 percent as of mid-year «determined that we will certainly... will be somewhere between 13 and 14 percent».