Credit Suisse likely to weigh buyback, says JP Morgan

Credit Suisse Group AG, Switzerland’s biggest bank by market value, may start buying back shares next year, JPMorgan Chase & Co analyst Kian Abouhossein said after a meeting with company executives.

Chief Executive Officer Brady Dougan addressed a “problem” of excess capital, Abouhossein said in a note to clients on Thursday. “Although Dougan feels discussing a buyback at this point is ‘premature’, we continue to believe in February 2010 Credit Suisse might have to take a buyback into account.”

Credit Suisse terminated its last share repurchase program in October after turning to investors for 10 billion francs ($9.3 billion) to meet the Swiss banking regulator’s increased capital requirements. The bank has raised a total of $12.3 billion after $17.8 billion in writedowns and losses from the credit crisis. The regulator told Credit Suisse and UBS AG last year that by 2013 they must comply with a new requirement of having a minimum core capital of 3 per cent of total assets on the group level. The Swiss National Bank said in a report released on Thursday that once the crisis has ended, the banks’ capital base should account for at least 5 per cent of their balance sheets.

Private banking
Zurich-based Credit Suisse is accruing a “material” dividend and is open to acquisitions in private banking, Abouhossein said. He has an “overweight” rating on Credit Suisse shares.

Credit Suisse fell 10 centimes, or 0.2 per cent, to 45.98 francs by 12:02 pm in Zurich trading, valuing the company at 54.5 billion francs. The stock has gained 61 per cent this year.