The former Lloyd’s Antonio Horta-Osorio, arrived in Zurich in April, he leaves again from wealthier customers to allow the Credit Suisse to turn the page definitively after the scandals Greenshill And Archegos, of which the Swiss group has paid the bill both financially and reputationally. The Credit Suisse has announced that it will downsize the business of investment banking and will focus on wealth management, division that will collect in a single entity worldwide the activities of three separate entities, where they will be injected resources for an additional 3 billion francs (2.84 billion euros).
At the same time the new business plan much awaited by the market will reduce the business of investment bank as part of a drastic reorganization that it will include a cut of over 3 billion dollars with the exit from the “prime services“ (main brokerage) between 2021 and 2022 and investing in sectors that, on the contrary, have competitive advantages such as those of consultancy and related to asset management.
“Risk management will remain at the heart of our actions, helping to cultivate a culture that reaffirms the importance of transparency and accountability,” commented Horta-Osorio. The bank registered a 21% decline in third quarter profit and foresees a net loss in the fourth quarter due to the impairment of goodwill linked to the activities of investment banking, with an extraordinary expense of approximately 1.6 billion Swiss francs.
The Credit Suisse plans to hire 500 private banker over the next three years, with the aim of increasing customer business volume to approximately 1,600 billion Swiss francs and have 1.1 trillion Swiss francs in assets under management by 2024, compared to the current 900 billion Swiss francs, including through a approximately 60% increase in investment in technologies by 2024. Furthermore, it will simplify the group structure into four divisions (investment banking, Swiss bank and asset management, in addition to wealth management) e four geographical areas (Europe, Middle East and Africa -Emea -, Asia-Pacific, Americas and Switzerland).
In addition to the scandals Greensill And Archegos, the Red Cross bank was also recently sentenced to pay one heavy fine as part of an investigation into a corruption and fraud affair in Mozambique which weighed on the quarterly accounts of the group. The group has in fact entered in the balance sheet 214 million francs of expenses for penalties imposed by the American and British authorities to put an end to the continuation of loans granted to state-owned enterprises of the African state. Burden that brought the depressednet profit for the third quarter of 434 million Swiss francs (410 million euros), down 21% year on year.
Revenues increased by 5% to 5.3 billion francs, thanks largely to the investment bank, who saw the turnover go up by 10%. Revenues are slightly above expectations of the market, which expected an average of 5.1 billion francs.
Credit Suisse It will invest capital in the growth ofinvestment banking from 2023, but always remaining at 50% compared to the other three divisions. The group provides a Rote above 10% by 2024, a cost / income of approximately 70% on an adjusted basis, with additional investments of CHF 1-1.5 billion per year by 2024 financed by savings on overhead costs. By 2024 the objective is also that of a Cet 1 capital index higher than 14% beforeBasel 3. The new organization will start in January 2022.
At the Zurich stock exchange, the stock marks an increase of 0.4% to 9.9 francs in the middle of the morning, while the SMI index is up by 0.6%. According to the operators, the reorganization of the group did not reserve any surprises compared to market expectations.
#Credit #Suisse #restarts #Scrooge #Hired #private #bankers