Credit Suisse replaces its boss and draws up a new restructuring plan – only nine months after the last one. The Zurich money house makes Ulrich Körner the new CEO. He replaces Thomas Gottstein, who is leaving after only two years in office full of scandals and major losses. After an unexpectedly high deficit of 1.59 billion francs in the second quarter, the bank wants to save at least another billion francs in costs.
Chairman Axel Lehmann is trying to bring Credit Suisse back to profitability and stability after the failures of Archegos Capital Management and Greensill Capital eroded investor confidence, weakened key businesses and triggered an exodus of executives. The Swiss bank has replaced the entire executive board and half of the board of directors in the last 18 months.
Credit Suisse has been involved in numerous scandals in recent years. Starting with the fiasco surrounding spying, which led to the replacement of Tidjane Thiam and flushed Gottstein to the top. Then revealed earlier this year Data from the financial institutionthe the Süddeutsche Zeitung leaked from an anonymous source that for many years Credit Suisse has accepted corrupt autocrats, suspected war criminals, human traffickers, drug dealers and other criminals as clients. This raised the question of how accurate the big bank is with its due diligence obligations.
While inflation and war are causing turbulence, the institute’s losses in the past three quarters have totaled almost four billion francs. Higher litigation expenses also contributed to the current quarter’s loss. The plans for the renewed realignment envisage that costs will fall to a total of CHF 15.5 billion in the medium term, a significantly more ambitious target than that set at the end of last year. At that time, a level of between 16.5 and 17 billion francs was still being targeted.
The new CEO Körner, 59, has worked for the two largest financial institutions in Zurich for more than 20 years: he initially worked for Credit Suisse for more than ten years before moving to UBS Group AG in 2009. There he worked with Axel Lehmann, who is now Chairman of Credit Suisse. Körner returned to Credit Suisse last year after losing out in a leadership reshuffle at UBS in 2019. He is now moving from leading the smallest of Credit Suisse’s four divisions to the difficult task of regaining investor confidence, which Gottstein failed to do after last year’s scandals.