banks are traditionally not activist targets, Credit Suisse Group AG (ADR) (NYSE:CS)
might be the exception. According to various sources, RBR Capital Advisors
, an activist investor, wants to increase its holdings in the bank to 1 billion Swiss francs, or around $1 billion dollars, to gain more sway over management.
The activist fund currently owns around 0.2% of the bank, and believes Credit Suisse’s stock could potentially double if management focused more on the Swiss and wealth management segments. To do that, Credit Suisse would have to spin off or divest its asset management and investment bank divisions.
As it stands, RBR has 250 million worth of francs in assets, with around 100 million of that invested in the bank. Given its rather small ownership, there is no guarantee that RBR will succeed in getting Credit Suisse Group AG (ADR) (NYSE:CS) to split itself. To achieve its goal, RBR would need to raise 900 million more as well. The fund will likely need the help of other shareholders, who may or may not necessarily be willing to help.
Although RBR has talked with 150 other investors of Credit Suisse Group AG (ADR) (NYSE:CS), shares of the bank haven’t done poorly. In fact, Credit Suisse shares are up 17% year-to-date. They also pay a nice 4.33% dividend yield at current prices. Credit Suisse’s performance also doesn’t really lag that of the sector. According to the most recent data, the Financial Select Sector SPDR ETF is up only 15.3% year to date.
In addition to asking for a split, RBR CEO Rudolf Bohli would like to see Credit Suisse overhaul its IT, which could potentially save the bank money in the long run. In response, Credit Suisse Group AG (ADR) (NYSE:CS) has said it is focused on its current strategy of restructuring and focusing on its wealth management segment. Although many analysts don’t think RBR has a good shot at its campaign, a split could potentially be good news.