By The Financial District
Jun 12, 20222 min
When asked if their company is for sale, most CEOs will give a boring, lawyer-approved response about how their company does not comment on rumors or speculation. Not Thomas Gottstein of Credit Suisse, Paul R. La Monica reported for CNN Business.
Photo Insert: Credit Suisse CEO Thomas Gottstein
When asked about rumors circulating on Wall Street about a possible acquisition of Credit Suisse (CS) by the American behemoth State Street Bank (SSB), Gottstein responded more succinctly.
"As you would expect, we never comment on rumors," Gottstein explained. "And my father once gave me advice: for really stupid questions, you better don't comment at all. So I think I will listen to my father's advice."
Due to its recent poor performance, Credit Suisse has been the subject of much takeover speculation. The stock has dropped roughly 30% this year and is close to a 52-week low.
A spokesperson for SSB also denied the rumor, telling CNN Business that "it is not pursuing an acquisition of, or any other business combination with, Credit Suisse."
SSB added that it has a long-standing company policy of not commenting on such speculation, but in this case "we feel a response to these reports is now warranted in this instance, as we are in the midst of a pending acquisition of Brown Brothers Harriman Investor Services."
This year, SSB stock has dropped about 25% as market volatility has harmed the company's massive exchange-traded fund (ETF) business.
Credit Suisse warned on Wednesday that it would report a second-quarter loss, owing largely to the volatility caused by Russia's invasion of Ukraine and rising interest rates. However, the European financial behemoth is also dealing with major internal issues.
Legal costs from the mortgage crisis a decade ago, as well as more recent fraud allegations, have eaten into profits. Several executives have left or been forced out of the company in recent years.
Recently, Credit Suisse's chairman resigned amid reports that he violated the company's own Covid-related travel policies. Credit Suisse was also hard hit by its exposure to the failed hedge fund Archegos, which resulted in a multibillion-dollar loss last year.