Topline
Credit Suisse, one of Europe’s largest banks by assets, announced Wednesday it is replacing its chief executive and will undertake a “comprehensive strategic review” in the wake of mounting losses, the latest attempt to turn the beleaguered bank around after numerous scandals and years of instability.
Credit Suisse is replacing its CEO after disappointing results.
Key Facts
Thomas Gottstein, who took over as chief executive in early 2020 after his predecessor Tidjane Thiam was embroiled in a spying scandal, announced he would step down as CEO after the bank posted a second-quarter loss of $1.66 billion, much worse than analysts expected.
Gottstein, who cited “personal and health-related” reasons for leaving, said the results were “disappointing,” particularly from the investment bank division.
Issues including higher litigation costs, the volatile geopolitical situation following Russia’s invasion of Ukraine and monetary tightening by central banks to curb inflation all contributed to the loss, Credit Suisse said.
Ulrich Körner, the bank’s asset management lead, will take over from Gottstein on Monday, the bank announced.
Credit Suisse also announced a new “comprehensive strategic review” to cut costs, turn business around and return to profitability, suggesting harsh cuts to its investment bank.
Credit Suisse chairman Axel Lehmann said the goal is to “become a stronger, simpler and more efficient Group with more sustainable returns.”
Key Background
Gottstein’s departure marks another yet another bump for Credit Suisse as the bank strives to move on from a series of scandals. This includes links with investment firm Archegos and supply chain financing firm Greensill Capital—which collapsed and cost the bank billions—a spying debacle that took out Gottstein’s predecessor and a mass exodus of senior staff. The strategic review is the bank’s second in less than a year.
Further Reading
Credit Suisse Boss Antonio Horta-Osorio Quits After Breaking Covid Quarantine Rules (Forbes)
Credit Suisse slumps to second-quarter loss as it names new chief executive (FT)
Source: https://www.forbes.com/sites/roberthart/2022/07/27/credit-suisse-replaces-ceo-after-17-billion-loss/