Thomas Gottstein of the Swiss bank Credit Suisse resigns. Since April, he was the only one left from the board of directors with which he took office, now he has to give up his position himself. Officially for personal and health reasons, the scandal-plagued Credit Suisse also announced a significant quarterly loss of 1.6 billion Swiss francs (1.6 billion euros) on Wednesday. Turnover fell in the second quarter by almost a third percent to 3.6 billion francs.
Ulrich Körner will lead Credit Suisse from August 1. He returned to the Swiss investment bank last year after 11 years at national rival UBS, where he had risen to the board of directors.
Credit Suisse also announced a “comprehensive” strategic refocus on Wednesday. It is certain that the previously very profitable investment bank, which acts for companies in capital transactions on the financial markets, will be phased out. The investment bank will mainly focus on advice.
scandals
Credit Suisse will continue to focus more on wealth management for wealthy clients. That is also the division Körner has led since his return to Credit Suisse last year, and the branch of UBS where he made his career. Under his leadership, Credit Suisse is initiating its second strategic reorientation within a year. In addition, the costs must be reduced ‘in the medium term’ to below 15.5 billion francs, the bank announced. Chief Executive Officer Axel Lehmann said on Wednesday that the new strategy should lead to a “stronger, simpler and more efficient company with sustainable returns.”
Also read: ‘Dictators and criminals could deposit billions at Swiss bank Credit Suisse’
Gottstein, 58, has only been the chairman of Credit Suisse since February 2020. He succeeded Tidjane Thiam when he had to resign due to an internal espionage scandal. Under his leadership, other members of the board of directors were shadowed. Gottstein had to repair damaged confidence within the bank and clean up the mess of Credit Suisse’s involvement in two financial scandals. Credit Suisse lost billions of francs both on raising capital to the British finance company Greensill, which went bankrupt, and on the collapse of the American hedge fund Archegos. In addition, the bank was fined for money laundering.
Legal costs
The loss in the second quarter was the third quarter loss in a row and, according to Credit Suisse, is strongly related to the uncertain geopolitical situation caused by the Russian invasion of Ukraine, high inflation and the monetary tightening policy of central banks. Financial markets have become more unpredictable as a result, according to Credit Suisse, and customers are showing restraint. Credit Suisse is also saying goodbye to more risky customers. Furthermore, due to its involvement in the Greensill and Archegos scandals, Credit Suisse has persistently high legal costs, which contribute to the loss.
Investors reacted cautiously positively to the announcement of the new CEO, the reorientation and the quarterly loss. The stock price rose 1 percent on Wednesday. Credit Suisse lost 44 percent of its market value in the past year.
A version of this article also appeared in the newspaper of 28 July 2022