Previous post Next post

Credit Suisse to shrink investment bank

Keystone / Urs Flueeler

The Credit Suisse Group says it will shrink its investment bank and shift more resources to the wealth management unit.

It is part of a restructuring plan intended to draw a line under a tumultuous year in which it was rocked by the Archegos Capital Management and Greensill scandals.

The Zurich-based bank is exiting most of its prime services business after the implosion of Archegos and shifting about $3 billion of capital from the investment bank to wealth management, according to a CS statement on Thursday. The bank is also re-organizing into four divisions and said that it will create a single wealth management unit.

According to the Bloomberg financial news agency, chairman Antonio Horta-Osorio has spent the past six months conducting a root-and-branch review of Credit Suisse after disastrous risk lapses wiped out billions in profit, plunged the bank into crisis and led to an overhaul of top management. By shrinking the investment bank and shifting more resources to wealth management he’s seeking to move away from more risky activities in favor of more stable returns.

“Risk management will be at the core of our actions, helping to  foster a culture that reinforces the importance of accountability and responsibility,” Horta-Osorio said in the statement.

The bank updated several targets and created several new ones. The  bank is targeting a return on tangible equity – a key metric of  profitability – of greater than 10% by 2024, compared with an earlier  medium target of 10% to 12%. It’s aiming to distribute 25% of profit in  2022, after suspending its share buyback earlier this year.

Since taking over in April, Horta-Osorio has focused on rebuilding the ranks of the risk division, after failures led to the departure of former risk and compliance head Lara Warner.

Full story here Are you the author?
About Swissinfo
Swissinfo
SWI swissinfo.ch – the international service of the Swiss Broadcasting Corporation (SBC). Since 1999, swissinfo.ch has fulfilled the federal government’s mandate to distribute information about Switzerland internationally, supplementing the online offerings of the radio and television stations of the SBC. Today, the international service is directed above all at an international audience interested in Switzerland, as well as at Swiss citizens living abroad.
Previous post See more for 3.) Swissinfo Business and Economy Next post
Tags: ,,

Permanent link to this article: https://snbchf.com/2021/11/credit-suisse-investment-bank/

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.