The Zurich-based bank took out multiple adverts in British newspapers over the weekend as part of a damage-limitation effort after law enforcement agencies descended on three of its European offices Friday in a coordinated raid related to a tax evasion and money laundering probe.
Its stock sold off accordingly, dropping nearly 5% between Friday noon and Monday morning, to change hands as low as Sfr14.29 before paring that loss to around 3.3%. But the pain may only just be beginning for investors.
"Our top three shorts would be Credit Agricole (CRARY) , Credit Suisse and BBVA(BBVA) - Get Report but believe all of the above have the potential to ravage portfolio performance," said James Chappell, an analyst at Berenberg, in a recent note.
European banks have been some of the biggest beneficiaries of President Donald Trump's election victory, with the Stoxx Europe 600 Banks index rising 17.7% against a 14% advance for the broader Stoxx 600 benchmark, as global inflation and interest expectations evolved.
But Chappell thinks expectations "already look overly optimistic as the long-term negatives remain, the benefit from higher rates is over-estimated, the comparatives for non interest income get harder and credit is as good as it gets."
He could have a point: Credit Suisse posted a fourth quarter 2016 loss of Sfr1.9 billion ($1.88 billion) and has barely budged in terms of gains so far this year, rising just 0.6% against a 4% rise for the Banks benchmark.
Added to this, a question mark is still hovering over the bank's capital buffer. CEO Tidjane Thiam said earlier this year that even with a CET1 ratio of 11.6% at the end of 2016, he was in a "more comfortable position from which to assess our capital options" and would instead look at a "broad range of options" alongside the idea of the partial sale of its Swiss business.
"We think that CS needs to raise at least (Sfr3 Billion) of external capital to begin discussions on material levels of capital return," Chappell said.
The bank has been flirting with the idea of an initial public offering of part of its Swiss unit for some time, although more recently reports have suggested it might prefer a sale of new shares instead.
Chappell also sees credit losses picking up from historic lows when rates begin to rise in Europe, which could exacerbate an already-bad problem with nonperforming loans and lead to more charges that eat into earnings.
Another problem for lenders like Credit Suisse will be changes to accounting rules, that come into effect in 2018, relating to the recognition of loan losses. These could also see loan loss charges picking up although nobody has been able to model quite how big the impact will be.
"No one wants to short banks, as little bad news can be seen on the horizon - that is where the opportunity lies."