Research Update: Credit Suisse Outlook Revised To Negative On Leadership Changes, Strategic Review, Market Headwinds; Ratings Affirmed

Credit Suisse's poor second-quarter performance, aggravated by a very challenging market environment, has triggered a change in leadership and another strategic review. We see increasing risks to the stability of the bank's franchise, uncertainty around the reshuffling of top executives, and a lack of a clear strategy, and we think the group's risk-adjusted and absolute profitability is likely to remain weak over the medium term. We revised our outlooks on Credit Suisse group entities to negative from stable and affirmed our 'A/A-1' ratings on Credit Suisse AG and other core operating subsidiaries, and our 'BBB' ratings on Credit Suisse Group AG. The negative outlook reflects the setbacks Credit Suisse could face in redesigning its strategy, with new management at the

...- Credit Suisse's poor second-quarter performance, aggravated by a very challenging market environment, has triggered a change in leadership and another strategic review. - We see increasing risks to the stability of the bank's franchise, uncertainty around the reshuffling of top executives, and a lack of a clear strategy, and we think the group's risk-adjusted and absolute profitability is likely to remain weak over the medium term. - We revised our outlooks on Credit Suisse group entities to negative from stable and affirmed our 'A/A-1' ratings on Credit Suisse AG and other core operating subsidiaries, and our '###' ratings on Credit Suisse Group AG. - The negative outlook reflects the setbacks Credit Suisse could face in redesigning its strategy, with new management at the helm, in order to transform the bank in an increasingly difficult operating environment....

Research Update