Credit Suisse’s share price plummeted. Will the new CEO save it?

Credit Suisse (SWX:CSGN) share price rose more than 2% in Switzerland after the troubled bank appointed a new CEO. Stocks have been on a strong downtrend over the past few months as the company has moved from one crisis to another. It has collapsed more than 65% from the 2021 high point, bringing its total market capitalization to around $16 billion.

The worst banking action

Credit Suisse’s share price has been on a steep downward trend in recent months as the company has come under siege. For example, the company was accused of racism when it ousted Tidjane Thiam as chief executive in 2020.

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The company was also caught up in last year’s implosion of Bill Hwang’s Archegos leadership. At the time, the company had lost more than $5 billion even as other Wall Street banks posted modest losses in the crisis.

Additionally, Credit Suisse lost money when Greensill imploded. The bank had provided loans to the Softbank-backed company. In a recent report, the bank said the crisis will cost its customers more than $291 million.

Credit Suisse suffered a reputational crisis when its chairman, Horta Osorio, resigned for breaking Covid rules. He was also accused of lavish spending for his use of the business jet.

Credit Suisse recently paid $22.6 million for the tuna bond crisis in Mozambique. He was also accused of financing criminals.

Credit Suisse’s share price rose in Switzerland after the company named Ulrich Korner as chief executive. He will replace Thomas Gottstein, who has served as CEO since 2020. Analysts believe the new CEO is likely to help solve the business as it faces many challenges.

In a statement, the company said it will offer a comprehensive review of its business as it seeks to reduce the importance of its investment banking business. This will be the second review in 12 months.

The company reported a pretax loss of $1.7 billion for the first half of the year. Its turnover has collapsed by 36% compared to the same period in 2021.

Credit Suisse Share Price Forecast

Credit Suisse stock

The daily chart shows that the Credit Suisse share price has been on a strong downtrend over the past few months. The sell-off saw it breach the important support level at $6.44, which was the March 2020 low.

Stocks are below the 25- and 50-day moving averages, while the Relative Strength Index (RSI) has moved slightly below the 50 neutral point.

As a result, stocks will likely continue to slide as investors focus on the company’s crisis and the new CEO’s new strategy.

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Karen J. Nelson