Credit Suisse is sliding deeper into the red—but it’s not throwing in the towel yet.
Switzerland’s second-largest bank posted a bigger-than-expected loss for the fourth quarter. In fact, it recorded the worst annual loss since the debilitating global financial crisis—7.3 billion Swiss francs ($7.9 billion) for all of 2022 versus 8.2 billion Swiss francs ($8.9 billion) back in 2008.
Still, chief Ulrich Körner still expects to return to profit in 2024, but that’ll only happen if the bank can realize its bold plans for restructuring—and if the lender can stay clear of scandals.
Credit Suisse’s disastrous quarter, by the digits
1.39 billion Swiss francs ($1.5 billion): Credit Suisse’s loss in the quarter ended Dec. 31, 2022
10%: Fall in Credit Suisse shares today (Feb. 9) after posting a fifth-straight quarterly loss
110.5 billion francs ($120 billion): Volume of client withdrawals
50%: Decline in the bonus pool for the whole bank. The executive board will receive no bonuses at all for last year
A brief recent history of Credit Suisse scandals
March 2021: British financial services company Greensill Capital, which focused on supply chain and accounts receivable financing, failed, causing Credit Suisse’s clients to lose as much as $3 billion on their investments.
April 2021: Credit Suisse takes a $4.7 billion hit in the meltdown of US hedge fund Archegos Capital. Credit Suisse, which provided brokerage services to Archegos Capital, including lending, fired at least seven executives in the aftermath.
Feb. 2022: Credit Suisse is accused of failing to prevent a Bulgarian crime ring from laundering money related to cocaine trafficking. A Swiss court finds the company guilty in June, and orders it to pay $22 million in the country’s first criminal trial of one of its major banks.
Also in Feb. 2022: Details of more than 18,000 Credit Suisse customer accounts holding more than 100 billion Swiss francs in accounts were leaked to German newspaper Süddeutsche Zeitung, revealing accountholders dubious identities—people involved in human trafficking, drug trafficking and torture, among other illicit activities. Earlier this month, Swiss authorities opened proceedings to investigate the source of the leak.
March 2022: US lawmakers start investigating Credit Suisse over compliance with sanctions against Russian oligarchs following Russia’s invasion of Ukraine.
The Klein Group acquisition
Credit Suisse announced the acquisition of The Klein Group, the investment banking business of M. Klein & Company LLC, for $175 million today (Feb. 9). It’s a bid to “progress the carveout of CS First Boston as a distinct, leading independent capital markets and competitive advisory led business,” the company said in a statement.
First announced in October, CS First Boston is being marketed as a “super boutique” that’ll rake in billions.
With the spinoff, Michael Klein has been appointed CEO of banking and CEO of the Americas, as well as designated CEO of CS First Boston. He joins the Executive Board and report directly to Körner.
“The creation of an independent CS First Boston is an important step in the wider transformation of Credit Suisse and the creation of a simpler, more focused bank built around the needs of our clients,” Körner said.
️⚠️ Credit Suisse has a poor track record of hiring and firing leaders
✂️ A third of job cuts at Goldman Sachs are due to affect its banking and trading units
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