{"id":111491,"date":"2021-04-07T17:26:50","date_gmt":"2021-04-07T17:26:50","guid":{"rendered":"https:\/\/fin2me.com\/?p=111491"},"modified":"2021-04-07T17:26:50","modified_gmt":"2021-04-07T17:26:50","slug":"analysis-credit-suisse-in-search-of-new-map-after-losing-way-with-archegos","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/analysis-credit-suisse-in-search-of-new-map-after-losing-way-with-archegos\/","title":{"rendered":"Analysis: Credit Suisse in search of new map after losing way with Archegos"},"content":{"rendered":"

ZURICH (Reuters) – Thomas Gottstein may have acted decisively enough this week to stay as Credit Suisse chief executive, but investors are likely to want more radical action after the bank\u2019s $4.7 billion loss from the Archegos hedge fund scandal.<\/p>

FILE PHOTO: The logo of Swiss bank Credit Suisse is seen at a branch office in Bern, Switzerland, Oct. 28, 2020. REUTERS\/Arnd Wiegmann\/File Photo<\/figcaption>

Credit Suisse shares have dropped by 25% in the space of a month, with Switzerland\u2019s second biggest bank reeling from its exposure to the collapse first of Greensill Capital and then Archegos Capital Management.<\/p>\n

This has left 57-year-old Swiss citizen Gottstein facing the daunting task of limiting the longer-term damage to the bank\u2019s reputation and retaining both clients and staff.<\/p>\n

\u201cIt\u2019s very disappointing what has happened in the last few months – it\u2019s well below the standard we have expected,\u201d one investor in Credit Suisse debt told Reuters.<\/p>\n

Yet Gottstein\u2019s hands will be tied until Antonio Horta-Osorio, known as AHO to some of the staff at Britain\u2019s Lloyds where he is CEO, is installed as chairman, analysts and investors said, adding that the deeper impact is yet to be felt.<\/p>\n

\u201cThe full consequences from the reputational loss will only be visible over time,\u201d Andreas Venditti, an analyst at Vontobel bank, said of the recent events.<\/p>\n

Credit Suisse said on Tuesday that it would take a 4.4 billion Swiss franc ($4.71 billion) charge after Archegos \u201cfailed\u201d to meet margin commitments.<\/p>\n

The scale of the charge, which is close to three times the investment bank\u2019s profit last year, far eclipses the $2.3 billion rogue trader loss at rival UBS in 2011.<\/p>\n

Swiss banks have not been afraid to jettison CEOs if things do not go to plan. The rogue trader affair triggered the departure of Oswald Grubel from UBS, while Gottstein\u2019s predecessor Tidjane Thiam was ousted over a spying scandal.<\/p>\n

Gottstein, a former investment banker and wealth manager who only took the helm a year ago, has responded quickly, replacing the head of the investment bank and the bank\u2019s risk chief.<\/p>\n

This followed his announcement that Credit Suisse\u2019s asset management unit was to be separated from its wealth business after it was forced to shut $10 billion of funds that invested solely in bonds issued by Greensill.<\/p>\n

WAITING FOR AHO<\/h2>\n

Investors expect broader changes will be hard to undertake until two externally-conducted inquiries into Archegos and Greensill and the change of chairman are complete.<\/p>\n

\u201cThis transition is a job guarantee for Thomas Gottstein in the short term,\u201d a source familiar with the matter said.<\/p>\n

Urs Rohner, who has been at the bank since 2011, is due to leave Credit Suisse at the end of April, with retail banking specialist Horta-Os\u00f3rio due to be elected at the upcoming annual shareholder meeting.<\/p>\n

\u201cWe hope that the change of chairman planned for the next AGM will allow the establishment of a new corporate culture with a more focused approach on risk management,\u201d Ethos, a firm which advises shareholders on how to vote at AGMs, said.<\/p>\n

Ethos has asked that the two investigations examine the board\u2019s accountability and the results are made public.<\/p>\n

The change of chairman has posed problems for some seeking reassurance during a turbulent time for the bank.<\/p>\n

\u201cI don\u2019t really know who to turn to,\u201d one senior advisor said, adding: \u201cGottstein has been weakened, Rohner will be gone soon and Horta-Osorio hasn\u2019t arrived yet. Everything is in flux, but leadership is needed now.\u201d<\/p>\n

A source close to Credit Suisse said that were it not for the planned change of chairman, the bank might already have embarked on significant structural changes.<\/p>\n

In the interim, Credit Suisse has been combing through exposures in its brokerage prime services, another source said, and a more thorough review is expected to result in it reducing risk within the unit and its broader investment bank.<\/p>\n

The more immediate concern is if clients and some of its top employees shift away following the most recent scandals.<\/p>\n

One headhunter in Hong Kong said that he had received several inquiries from employees in Credit Suisse\u2019s markets business looking to leave in the wake of the Archegos scandal.<\/p>\n

The chairman of a wealth management boutique in Monaco said he saw a chance to lure some top Credit Suisse private bankers.<\/p>\n

\u201cFor someone like us, as a boutique, and other competitors of Credit Suisse, it\u2019s a great opportunity to gain more market share with the ultra high net worth segment,\u201d the wealth manager, who declined to be named, added.<\/p>\n

Credit Suisse declined comment on a potential loss of staff.<\/p>\n

Christian Meissner, who is to take charge of the investment bank following Chin\u2019s exit, has been tasked with retaining talent and winning business in areas where Credit Suisse is doing well, such as listing special purpose acquisition companies (SPACs), a source close to the Austrian banker said.<\/p>\n

\u201cPeople won\u2019t quit just yet, they would need to find new jobs first and this gives Meissner time to show they can still be competitive and win mandates,\u201d the source said.<\/p>\n

Gottstein told Swiss newspaper NZZ on Tuesday that he still believed in the \u201cone bank\u201d model where divisions work together to serve wealthy clients, saying it \u201cenhances\u201d risk management.<\/p>\n

If he sticks with the model, he will need to map a path to profitability, while keeping a much tighter rein on risk.<\/p>\n

\u201cThey\u2019ve lost earnings and they won\u2019t get it back until they find another way,\u201d Jason Teh, chief investment officer at Vertum Asset Management in Sydney, said.<\/p>\n

($1 = 0.9336 Swiss francs)<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

ZURICH (Reuters) – Thomas Gottstein may have acted decisively enough this week to stay as Credit Suisse chief executive, but investors are likely to want […]<\/p>\n","protected":false},"author":3,"featured_media":111490,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nAnalysis: Credit Suisse in search of new map after losing way with Archegos - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/analysis-credit-suisse-in-search-of-new-map-after-losing-way-with-archegos\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analysis: Credit Suisse in search of new map after losing way with Archegos - Fin2me\" \/>\n<meta property=\"og:description\" content=\"ZURICH (Reuters) – Thomas Gottstein may have acted decisively enough this week to stay as Credit Suisse chief executive, but investors are likely to want [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/markets\/analysis-credit-suisse-in-search-of-new-map-after-losing-way-with-archegos\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-04-07T17:26:50+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/04\/cnewsfotor1185-1.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/markets\/analysis-credit-suisse-in-search-of-new-map-after-losing-way-with-archegos\/\",\"url\":\"https:\/\/fin2me.com\/markets\/analysis-credit-suisse-in-search-of-new-map-after-losing-way-with-archegos\/\",\"name\":\"Analysis: Credit Suisse in search of new map after losing way with Archegos - 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