Credit Suisse gets short-term relief, but questions remain, says JPMorgan

JPMorgan analyst Kian Abouhossein keeps a Neutral rating on Credit Suisse following the announcement overnight that the bank is taking actions to strengthen liquidity by intending to exercise its option to borrow from the Swiss National Bank up to CHF 50B under two facilities. The tapping of these two facilities allows Credit Suisse to further strengthen its liquidity position and the CHF 3B senior debt repurchase helps with optimizing interest expense and overall liability composition which is helpful in the short-term, allowing the company "to calm down markets," the analyst tells investors in a research note. However, more medium to long-term, Credit Suisse’s "situation is about ongoing market confidence issues," says the firm. It believes that while these steps will provide short-term relief, providing the bank "much needed time to progress on its restructuring," questions remain around the complexity of the investment bank restructuring and the ongoing franchise erosion in the meantime.