Credit Suisse will not abandon investment bank: chairman

Swiss banking giant Credit Suisse will stick with its investment bank and does not plan a major overhaul similar to the one recently announced by UBS, the bank's chairman said in an interview published on Saturday.

Credit Suisse will not abandon investment bank: chairman
Credit Suisse headquarters at Paradeplatz, Zurich (Photo: Credit Suisse Group).

"It is true that there are some people who expect us to completely pull out of investment banking," Credit Suisse chairman Urs Rohner told the Basler Zeitung daily.

However, he said, "these people do not realize that the capital market business is critical for the functioning of efficient global markets and important for a globally oriented economy like Switzerland's."

Switzerland's second largest bank was therefore planning to remain "at the forefront" of the investment banking sector, he said.

His comments came after Credit Suisse's larger competitor UBS announced on October 30th it would cut nearly 10,000 jobs as part of a massive restructuring of its ailing investment bank.

The overhaul involves shedding some high-risk activities and essentially withdrawing from the fixed income business that had burdened it with catastrophic losses during the 2008 "subprime" crisis.

While ruling out such radical measures for Credit Suisse, Rohner did acknowledge that some restructuring of the investment bank unit might be needed.

"It is possible that we will have to carry out further adaptations in terms of staff," he said in the article, published a day after Credit Suisse announced it would cut 300 jobs in Switzerland as part of a plan to merge its retail and private banking units.

He acknowledged that the investment bank was still absorbing 60 percent of Credit Suisse's own capital.

"That is too much in the long term," he said.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Probe unearths second spying case at Credit Suisse

An internal Credit Suisse probe confirmed Monday that a second executive had been spied on, following earlier revelations that the bank's former head of wealth management was tailed by private investigators.

Probe unearths second spying case at Credit Suisse
Photo: Depositphotos

But Switzerland's number two bank maintained that just one senior leader, who has since been forced out, was entirely to blame for both incidents and that rest of the top brass had not been aware of the activities. 

Releasing the investigation conducted by the Homburger law firm, Credit Suisse said that “it has been confirmed that Peter Goerke, who was a Member of the Executive Board at the time, was placed under observation by a third-party firm on behalf of Credit Suisse for a period of several days in February 2019.”

The probe was launched following media reports last week that spying at Credit Suisse ran deeper than one case.

The banking giant was shaken by the discovery last September that surveillance had been ordered on star banker and former wealth management chief Iqbal Khan.

READ: Credit Suisse boss resigns following spying scandal

Kahn was tailed after he jumped ship to competitor UBS, sparking fears he was preparing to poach employees and clients.

That revelation came after Khan confronted the private investigators tailing him, leading to a fight in the heart of Zurich. Khan pressed charges.

An initial investigation by Homburger blamed former chief operating officer Pierre-Olivier Bouee, who stepped down, but found no indication chief executive Tidjane Thiam was involved.

The probe results released Monday echoed those findings, concluding that Bouee “issued the mandate to have Peter Goerke put under observation.”

“As was the case with Iqbal Khan, this observation was carried out via an intermediary,” it said, stressing that Bouee “did not respond truthfully” during the initial investigation “when asked about any additional observations and did not disclose the observation of Peter Goerke.”

The new investigation also did not find indications that Thiam or others in the board or management “had any knowledge of the observation of Peter Goerke until media reported on it,” the statement said.

“The Board of Directors considers the observation of Peter Goerke to be unacceptable and completely inappropriate” it said, adding that it had issued an apology to Goerke.

It added that “safeguards” were already in place to avoid future similar misconduct. Switzerland's market watchdog FINMA meanwhile said last week that it was “appointing an independent auditor to investigate Credit Suisse in the context of observation activities.”

“This investigator will clarify the relevant corporate governance questions, particularly in relation to the observation activities,” a statement said Friday.