Credit Suisse: Smoke Signals from Activist Investor

Credit Suisse: Smoke Signals from Activist Investor

The last occasion he commented officially on his plans for Credit Suisse was at the beginning of last year, when he announced the closing of his RBR fund. At the time, Bohli also said he would henceforth only appear as a shareholder activist, and would focus on his plan to transform Credit Suisse into a digital wealth manager.

Exit Point Missed

The past year would have been the perfect time for Bohli to convert his Credit Suisse stake into cash, since the bank's share price has risen by some 20 percent since his entry last autumn.

A healthy profit in less than four months – even if Bohli’s goal, with the implementation of his measures, is a doubling of Credit Suisse’s share capitalization. The shares have headed lower since January.

At 15.92 Swiss francs, the share price is around the level of last October. Bohli’s efforts to garner more shareholder support for pressuring the Credit Suisse's management under CEO Tidjane Thiam to radically alter their strategic direction seems to have borne little fruit.

«Subject is Still Relevant»

Asked this week by finews.com about his plans for CS, Bohli responded: «The subject is still relevant.» He declined however to make any further comment. Just how the former Bellevue banker plans to enforce his demands remains unclear.

He has tried various tactics: Using English-language media to drum up interest, and using his appearance at the Robin Hood investor conference in New York to win over small shareholders.

Bohli has repeatedly voiced his intention of drumming up around a billion francs to help support his «pure Swiss banking» plan. Up to now there are no signs this has worked.

Too Radical, Too Risky

This despite the fact that his outline for the bank as a digital wealth management pure player is not a bad idea. Such plans, including the splitting off of the investment bank and a separate listing for the «old» Credit Suisse First Boston in the U.S., are still in the hands of McKinsey or KPMG advisors.

A complete overhaul of the information technology platform, which would catapult Credit Suisse a new digital future, has also been assessed by the bank. The problem with Bohli‘s plan is that it is too radical and risky for winning of the support of the majority of large institutional investors – too radical because large have already invested billions in CEO Thiam's current strategy.

And too risky because splitting off the investment bank would affect the nerve-center of the bank. Secondly, a total revamp of the IT platform would represent a billion franc project that would take years to complete.