State Street denied that it was in talks to acquire Credit Suisse, and rejected a report prosecuting the Zurich-based lender.
The U.S. custodian bank on Wednesday had initially declined to comment on a report from a Swiss bloc that was preparing an offer, exacerbating the sharp movements in the actions of both lenders.
In a statement on Thursday, State Street said that “it is not pursuing any acquisition or other business combination with Credit Suisse. There is no basis for continued market rumors. Although we have a company policy of long time no comment on these speculations, we believe that a response to these reports is now justified in this case. “
Earlier in the day, Credit Suisse CEO Thomas Gottstein was asked about the report at Goldman Sachs’ European Finance Conference in Rome. He replied, “I never comment on the rumors. My father once gave me a piece of advice: for really stupid questions, you’d rather not comment on anything. In that case, I’ll listen to my father’s advice.”
Shares of Credit Suisse fell nearly 6% after both companies ruled. State Street shares rose briefly after its denial and rose nearly 1% in the afternoon in New York.
A day earlier, shares of Credit Suisse reached a 30-year low of 6.20 SFr after its third earnings warning since January, but rose after the acquisition report on the Swiss blog Inside Paradeplatz, which ended on Wednesday in positive territory.
Inside Paradeplatz quoted a single source as saying that State Street was offering an offer of 9 SFr per share for Credit Suisse.
Although he initially declined to comment, the U.S. lender noted that it was still in the process of finalizing its $ 3.5 billion purchase of Brown Brothers Harriman’s asset custody and maintenance business. Its shares fell 5.5 percent on Wednesday, with investors apparently worried that it would be less than a resounding negative.
Analysts say they see little benefit in buying Credit Suisse on State Street, but did point to the potential for a possible combination of banks’ asset management divisions.
State Street Global Advisors specializes in index funds and exchange traded funds, while Credit Suisse Asset Management focuses on higher-margin active products.
Asked about possible companies involving CSAM during the Goldman Sachs event, Gottstein said there were no plans and that the asset management business was one of the bank’s four core divisions.
Gottstein was also asked about the bank’s prospects of coming out of three consecutive quarters of losses.
He said the bank had pledged to meet or potentially fall short of its cost target of 17 billion French francs for the year, with certain savings initiatives accelerating, though add that the bank would not make any concessions on risk and compliance.