Credit Suisse investment bank’s poor numbers open the door to competitors


Hi. I am Aaron Weinman. Credit Suisse wants to cut costs at its investment bank. Competing investment bankers are feeling the blood in the water as they hover around the business of their Swiss counterparts.

Before digging into this, the Federal Reserve raised its benchmark interest rate three-quarters of a percentage point. I stopped by CBS to talk about how it affects your wallet.

Now back to Credit Suisse.

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This illustration photo shows a sign with the logo of the second largest bank in Switzerland "Swiss credit" at their headquarters in Zurich on March 23, 2022.

A law firm has sued Credit Suisse for misleading investors about business dealings tied to Russian oligarchs.

Fabrice Coffrini/AFP via Getty Images

1. Credit Suisse’s lackluster investment banking numbers and decision to reduce costs within the divisionhas rivals “dancing on their grave”. That’s how one capital markets banker described the mood of his colleagues, who were keen to snatch business from the ailing Swiss bank.

It’s a common textbook in the world of investment banking. Rivals – all clamoring for pitch meetings with US companies – are quick to point out competitors’ flaws. In the case of Credit Suisse, they will also remind companies of the bank’s exposure to risk management scandals involving Archegos Capital Management and bankrupt supply chain financier Greensill Capital.

“A big wealth management company with investment banking as a hobby. It’s very good for us. I think we’ll take some of them,” the capital markets banker said.

And this part is important. Credit Suisse has finished in the top seven investment banks in the U.S. bond and loan markets for the past three years, while it was in the top 10 in the U.S. equity markets, driven by activity Solid SPAC in recent years, according to Dealogic data.

The investment bank, however, posted a loss of about $1.2 billion for the quarter, down 43% from the same period last year.

Like UBS, Credit Suisse has focused on growing its wealth and asset management businesses. The bank also announced that outgoing chief executive Thomas Gottstein will be replaced by Ulrich Körner, who currently heads its asset management arm.

Körner – nicknamed “Uli the Knife” in This article by the Financial Times – helped reshape UBS after the 2008 financial crisis. Now he will seek to reshape a brand in need of a makeover and a company plagued by weaker numbers.

“The bank needs a seismic wake-up call,” said a Credit Suisse banker, who, when asked about Wednesday’s results, simply texted me back with tearful emoticons .

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Thomas Lauria, bankruptcy lawyer at the law firm White & Case

Thomas Lauria, bankruptcy lawyer at the law firm White & Case

white and case

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Offers concluded:

  • First Eagle Alternative Credit closed its fifth direct lending fund with over $1 billion in available capital. The fund lends to private equity firms with earnings before interest, taxes, depreciation and amortization between $5 million and $50 million.
  • Carlyle’s global credit platform has arranged and directed financing for Spotless Brands, the car wash operator owned by private investment firm Access Holdings. The amount or terms of the funding were not disclosed.

Organized by Aaron Weinman in New York. Tips? E-mail [email protected] or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.


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