ΚYLE BASS on Credit suisse : 3 weeks time

Credit Suisse :Stock falls over 21% after the statement of the saudi National bank

Road115blogspot had warned several times about Credit Suisse, even after capital raise.Now stock is on the brink.

Match report: Man City 4 Chelsea 0 - ENOUGH IS ENOUGH Chelsea is a big team

Chelsea exited a second domestic cup competition at the hands of Man City this season with the damage done in 15 first-half minutes. As in the Carabao Cup tie in November, a Riyad Mahrez free-kick broke the deadlock, on this occasion midway through the first half. It was 2-0 in no time when Julian Alvarez converted a penalty awarded after a VAR check for handball against Kai Havertz. Having been undone by a pair of set-pieces, a fluent move cut us open and produced a third goal for the champions before the break, Phil Foden the scorer. The second half was a closer contest but we couldn’t muster a shot on target, and City had the final word through another penalty, this one converted by Mahrez late on. The selection Graham Potter handed 19-year-old Bashir Humphreys his professional debut. He lined up next to Kalidou Koulibaly in central defence. The other positive for Potter pre-match was that he was able to welcome Mason Mount back into the side. They were two of six fresh faces. Trevoh Chalobah and Lewis Hall also started in defence, the latter having made his full debut at this stadium in the Carabao Cup tie prior to the World Cup. Ahead of them, Jorginho returned in midfield to partner Mateo Kovacic. However, Christian Pulisic and Raheem Sterling did not make the matchday squad having gone off injured early in Thursday’s league meeting. With Pierre-Emerick Aubameyang also not involved, in came Hakim Ziyech and Connor Gallagher. The bench included new signings Benoit Badiashile and David Datro Fofana, the latter coming on for the second half. Remembering Luca The Chelsea players warmed up in shirts with the number nine on the back in honour of Gianluca Vialli, who so sadly passed away on Friday. Our former striker and manager was also celebrated with a minute’s applause before kick-off, and the 7500-strong away support chanted Vialli’s name with extra vigour. As on Thursday, Chelsea started confidently. We beat City’s press on a couple of occasions early on to nearly fashion openings, although it was Kepa who was called into action first, smothering a low Mahrez cross. The Spaniard then got a slight touch on Cole Palmer’s shot when we had allowed the young City midfielder to break beyond our backline. Havertz’s touch eluded him when we tried to do likewise having impressively played out from the back. Mahrez again Midway through the first half, though, lightening struck twice. Not only did Mahrez win Thursday’s game, he had opened the scoring with a free-kick in the Carabao Cup tie here. The Algerian repeated the trick from further out this time, bending his strike into the top corner.

Credit Suisse Keeps Sinking The second Swiss bank revives fears about its solvency yet again. - thestreet.com

The end of 2022 could be a nightmare for Credit Suisse. The second largest Swiss bank is once again in the line of fire, with the resurgence of fears and questions about its solvency. The bank's shares fell on November 29 to a new life-to-date low below 3 Swiss francs, to 2.9080 Swiss francs. Since the start of the year, Credit Suisse shares have lost more than 67% of their value. Market capitalization is now only 9.05 billion Swiss francs. This last figure takes into account the issue of a first batch of new shares. The data show that Credit Suisse is no more than a shadow of what it once was, the European banking flagship that made Switzerland proud. It’s just a giant with feet of clay. The continued decline of the firm, plagued by repeated scandals, shows that the strategic plan presented on October 27 to try to revive Credit Suisse is struggling to convince investors. They no longer hide fears that the bank is facing a short-term liquidity crisis. Massive Outflows Credit Suisse's (CS) - Get Free Report five-year credit default swaps (CDs), a form of insurance for bondholders, hit a new record high of 403 basis points, according to data from S&P Market Intelligence. This means that investors holding the bank's debt have to pay a lot more to insure themselves for the event that Credit Suisse cannot repay them. When the cost of CDSs rises sharply, it suggests that investors clearly doubt that the company will be able to honor its debts. The new fears were reignited on Nov. 23, after the bank warned that it would post a heavy loss in the fourth quarter. This deficit is due to massive outflows of money from customers, particularly in the asset management division, seen as the centerpiece of the new Credit Suisse. There are also massive withdrawals from Swiss customers in retail banking. "Credit Suisse would expect the investment bank and the group to report a substantial loss before taxes in the fourth quarter 2022, of up to CHF ~1.5 billion for the group," or $1.6 billion, it said in a press release. "The group’s actual results will depend on a number of factors including the investment bank’s performance for the remainder of the quarter, the continued exit of non-core positions, any goodwill impairments, and the outcome of certain other actions, including potential real estate sales." The investment bank has been impacted by the substantial industry-wide slowdown in capital markets and reduced activity in the sales & trading businesses, exacerbating normal seasonal declines, and the group’s relative underperformance, Credit Suisse explained. Client activity remains subdued in wealth management, and the bank expects these market conditions to continue in the coming months. However, there is worse: the firm experienced deposit and net asset outflows in the first two weeks of October at levels that "substantially" exceeded the rates incurred in the third quarter. As of November 11, net asset outflows were approximately 6% of assets under management at the end of the third quarter. "These outflows have led the bank to partially utilize liquidity buffers at the group and legal entity level" causing the bank to fall "below certain legal entity-level regulatory requirements," Credit Suisse said. 'Demotivation' This warning sounded the alarm with investors, who saw it as a harbinger of very bad news to come. "In short, Credit Suisse is starting to act like a bank that’s about to go under,” analyst Tom Essaye of the Sevens Report said in a recent note. The mistakes of the investment bank have plunged Credit Suisse into numerous successive scandals in recent years, reviving speculation about a bankruptcy or a merger with its rival UBS. Two scandals occurred almost one after the other in 2021, and caused losses of several billion dollars for the bank. The first was the bankruptcy of British company Greensill and the second was the failure of family office Archegos Capital Management. Another sign of the nervousness and pessimism surrounding Credit Suisse: investors dumped rights to subscribe to new shares in the firm. The subscription rights tumbled 22% to 0.112 on the second day of trading on the Swiss bourse on November 29, according to Reuters. The capital increase of 4 billion Swiss francs ($4.2 billion) was approved on November 23 by the shareholders and aims to finance the restructuring of Credit Suisse. Credit Suisse's revamp is considered an emergency plan to clear up uncertainty about its future. The firm wants to cut 9,000 jobs by 2025, including just over 2,700, or 5% of the workforce, by December, 31.Overall, Credit Suisse wants to reduce its cost base by 14.5 billion Swiss francs in three years. It also plans to break up the investment bank into three parts and sell a "significant portion" of its Securitized Products Group business. The difficult year has had an impact on employee morale, Andre Helfenstein, the head of the bank’s Swiss unit, said in a recent interview with Swiss newspaper SonntagsZeitung. "I wouldn't say demotivation, but rather a certain level of fatigue and sometimes frustration," Helfenstein said.

Credit Suisse Shares Dip to All-time Low - finews.com

Credit Suisse: The Saudis are now Aboard PDF Rights trading for Credit Suisse shares started today and, as expected, the price headed lower. But the discount is significantly greater than anticipated. On Friday, Credit Suisse shares closed at 3.318 francs. Today, subscription rights trading started and the price was down significantly. During intraday trading shares traded at a low of 2.955 francs, a drop of almost 11 percent and a new all-time low. Prices recovered somewhat to over 3 francs again to 3.072 francs, but are still down around 7.3 percent since the start of trading. Two Shares for Seven Rights That the share price will be reduced by the value of the subscription rights, traded separately on the SIX exchange starting today, was to be expected. However, while the rights issued 1 for 1 are currently valued at 0.156 Swiss francs, the share discount amounts to 0.259 Swiss francs. In the course of the second capital increase, shareholders received one subscription right per share held. For seven of these rights, they can purchase two Credit Suisse shares for 2.52 francs. In purely operational terms, the capital increase is expected to net Credit Suisse around 4 billion francs of fresh capital and has gone off like clockwork, yet the share price itself is not finding any support.

Credit Suisse Swiss Head Seeks to Calm Outflow Concerns- finews.com

Credit Suisse is Bleeding Managed Assets Credit Suisse Shareholders Greenlight Capital Raise The head of Credit Suisse's Swiss business gave an interview on Sunday with an influential Swiss newspaper seeking to allay concerns about money outflows at the troubled bank. After Credit Suisse shares plunged nearly seven percent to an all-time low of 3.32 francs on Friday, André Helfenstein, CEO of its Swiss Business sought to exude calm and allay fears about money outflows in the Swiss unit in an interview with the «Sonntagszeitung» (paywall, in German). «We lost a total of 1 percent of our asset base,» Helfenstein specified, adding that few Credit Suisse clients closed their accounts after the money was withdrawn. In addition to the money outflows, job cuts are a hot topic of conversation around the bank. Helfenstein said that at the Swiss unit, a reduction in headcount will come primarily from natural attrition. No Split-up of the Bank He also rejected rumors the bank would be separated into Swiss and international units or that the private client business and asset management might be sold. The current structure of the Swiss Bank has the decisive advantage of offering internationally focused Swiss clients the option of drawing on the expertise and services of global asset management and investment banking teams. Inappropriate Moralizing Helfenstein understood concerns about «cultural consistency» at the institution, of which questions were raised following Saudi National Bank becoming a new major shareholder. «However, we have to be careful with our supposed moral high ground.» Much of the economy is based on oil, he said, and why prosperity in this country as a whole is closely tied to those countries. Up a Year's Pay Helfenstein also addressed job cuts which are part of the restructuring Credit Suisse is currently undergoing. The only factor in the announced cutback of 2,000 jobs in Switzerland is the type of job, not the age. Cuts would come less in the business with clients in asset management, retail banking, institutional business, or with corporate clients. The bank, meanwhile, must be able to adapt to changes in the industry, for example, to cope with advancing digitalization. Exploiting Fluctuation Helfenstein added the job cuts will be made as far as possible through natural attrition, and employees affected would receive their salaries for seven to twelve months. Another option is early retirement which is possible from the age of 58.

Where is the bid from Saudi;s ;

Credit Suisse : big loss or bigger loss;

Credit Suisse: Adrift in the Fog - finews.com

With its new strategy, Credit Suisse management wants to create clarity on how the crisis-ridden bank will navigate the next three years. But it is not even apparent how exactly it will get through this year. It sounds more like a hopeful prayer than a strategy: «The Group’s actual results will depend on several factors including the Investment Bank’s performance for the remainder of the quarter, the continued exit of non-core positions, any goodwill impairments, and the outcome of certain other actions, including potential real estate sales,» Credit Suisse said in its fourth-quarter outlook published today. So an equation with at least four variables will determine whether the expected loss will be 1.5 billion francs. Or less. Or more. Share Price Lower Again Above all, it is uncertain whether Credit Suisse can staunch the outflow of client assets by the end of the year. About 84 billion francs were withdrawn across the group between the end of September and November 11. The core business with wealth management lost every tenth customer franc, a total of more than 63 billion francs headed for the exits, almost ten times the 6.4 billion francs in net outflows the division reported in the previous third quarter. If anything, the hemorrhaging in the core business appears to be accelerating. The bank warned of «subdued» client activity in wealth management, and that difficult market conditions are likely to persist in the months ahead. After the brief moment of clarity following October's new corporate strategy, the share price of Switzerland's second-largest bank drifted into the fog, at times falling by more than 5 percent in morning trading. This means that the shares have lost more than a tenth of their value within a week alone. Hardly a ringing market endorsement. Hundreds of Millions for Restructuring That a large majority of shareholders approved Credit Suisse carrying out two capital increases cushioned some downward pressure. After all, the bank will have around 4 billion francs in fresh funds to strengthen its capital base and finance its costly restructuring, a project that will cost the bank 250 million francs by the end of the year alone. «Today’s vote by shareholders marks a further important step in our journey to build the new Credit Suisse,» said Chairman Axel Lehmann on the outcome of the vote. However, Lehmann and the management team around CEO Ulrich Koerner seem to be steering the firm into a fog bank. The veteran banker and cost cutter in October managed to present a radical cure for Credit Suisse, which offered at least some reprieve. To be sure, milestones have been reached, such as the sale of parts of the business with investment banking. And now, of course, the urgently needed financial injection. Question of Returns Since the strategy was announced in October, the bank's situation has taken another sharp turn for the worse. In a closed system, Koerner's plan might have been quite impressive. But now the turnaround has to happen in an environment that BAK Economics considers much more difficult for Swiss banking as a whole. It is also significant that managers of more solidly capitalized private banks have in the meantime been pumping the brakes on costs across the board, as finews. com recently observed. In addition, the new strategy had at least one ambiguity from the very beginning. With the targeted return on equity of 6 percent by the end of 2025, it is probably unlikely for the bank to earn its cost of capital. Since the earnings base in wealth management is now rapidly crumbling, a question mark must probably be placed behind that target itself.

Credit Suisse Sees $1.6 Billion Fourth Quarter Loss - Bloomberg

Cash Exodus Loss expected in wealth division and investment bank Continues to see outflows of customer assets in fourth quarter By Marion Halftermeyer Credit Suisse Group AG warned it will book a loss of up to 1.5 billion Swiss francs ($1.6 billion) for the fourth quarter, and reported further outflows of wealth management funds amid a slump in client confidence. The Zurich-based bank said in a statement Wednesday it expects losses in both the wealth management division and its investment banking unit due to subdued activity, market conditions, continued outflows of customer assets and the sale of

Credit Suisse Bleeding Managed Assets- finews.com

Since the end of the third quarter, Credit Suisse experienced a further drop in assets under management. It warns of a loss in its wealth management business. Ahead of its extraordinary general meeting later today, Credit Suisse provided its outlook for the fourth quarter in which it said the outflow of deposits and assets continued since the end of the third quarter. Credit Suisse started experiencing deposit and net asset outflows during the first two weeks of October 2022 at levels that «substantially exceeded» rates seen in the third quarter. At the Group level, net asset outflows were approximately 6% of assets under management compared as of November 11, compared to the end of the third quarter, Credit Suisse said in a statement. The Swiss unit fared better where client balances stabilized and were approximately 1% of assets under management at the end of the third quarter. Today's EGM seeks shareholder approval for a capital increase, while major investors are pouring capital into the bank, among them Saudi National Bank, which plans to provide 1.5 billion francs which could give it 9.9 percent of the bank. Credit Suisse seeks to attract about 4 billion francs in new capital with the move. Wealth Management In the wealth management unit, the outflows were «reduced substantially» from the levels of the first two weeks of October, although have not reversed altogether and were about 10 percent of assets under management at the end of the third quarter. Lower deposits and assets under management are expected to result in reduced net interest income. recurring commissions and fees, and is likely to lead to a loss for Wealth Management in the fourth quarter, Credit Suisse said. Looking Ahead As previously announced, the bank expects the investment bank and the Group to report a «substantial» pre-tax loss in the fourth quarter of up to 1.5 billion Swiss francs for the Group. The statement went on to say the group’s actual results depend on a number of factors including the investment bank’s performance for the remainder of the quarter, exiting non-core positions, goodwill impairments, and other outcomes such as other actions, including potential real estate sales. Confirms Capital Ratio Guidance The Group confirmed the capital ratio guidance from October 27, targeting a 2025 CET1 ratio of over 13.5%, while expecting to maintain a pre-Basel III reform CET1 ratio of at least 13% throughout the transformation period in 2023 through 2025. Liquidity Buffers It also deployed liquidity buffers at the Group and legal entity levels. Although the bank fell below certain legal entity-level regulatory requirements, the core requirements of the liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) at the Group level have been maintained throughout.

Credit Suisse's Future Hinges on Overcoming a Fraught Past- bloomberg

How a bastion of Swiss banking lost its way. For more than 160 years, Credit Suisse Group AG’s stone-clad headquarters on Zurich’s moneyed Paradeplatz has exuded power, stability and quiet wealth. Those days are over. While the building’s colonnaded facade is still a sight to behold, the operations inside are suffering deeply, and the bank’s ability to bounce back hangs in the balance. Rocked by a steady drumbeat of scandals and management upheaval in recent years, the company that helped position Switzerland as a linchpin of international finance is losing billions of dollars. Key employees are leaving, and some clients have pulled out money. With the stock at record lows—

Everyone's Down On Credit Suisse. Here's Why I Love It.

There are no two ways about it -- Credit Suisse Group AG (CS) is a disaster. From 2021's implosion of hedge fund Archegos Capital to recently announced fundraising at less-than-ideal terms (not to mention a few other gaffes in the meantime), it's no wonder Credit Suisse shares are now priced at a third of their pre-pandemic peak from early 2020. Indeed, the stock's lost more than 90% of its value since 2007's high, largely due to the same lack of discipline that's been so pronounced just within the past few months. But as the old adage goes, nothing lasts forever. Enough shareholders and creditors finally had enough to jolt the Zurich-based outfit into real change. The stock may be near a major bottom, if it hasn't hit one already. Meet the (almost) new and improved Credit Suisse On the off chance you're reading this and don't already know, financial firm Credit Suisse is on the ropes. Its oversized stake in now-failed hedge fund Archegos is arguably its biggest recent blunder, leading to $5.5 billion in booked losses in early 2021. The blunder, however, is merely a proxy for the bank's other poor decision-making of late. Bribes, the backing of loans riskier than Credit Suisse was led to believe, and a lack of client oversight that implicated the bank as a drug-money launderer are some of the other missteps it's made just within the past few years. Now, with little other choice, the company is finally making necessary changes. One of those changes is the impending sale of much of its securitized products business to private equity outfit Apollo Global Management. Credit Suisse says this move will allow it to better focus on its core banking businesses. The move is also just a sampling of what's to come. In October, the company unveiled plans to drastically reduce its exposure to such risk-weighted assets, and ramp up its exposure to markets-related operations. Credit Suisse says it intends to devote 80% of its capital to wealth management and investment services by 2025. In the meantime, it's creating a division tasked with accelerating the "run-down of non-strategic, low-return business and markets, to release capital." Current CEO Ulrich Körner is the right person to lead this overhaul effort. He's something of an outsider with no particular ties to the old company or its old ways. He was only hired as the CEO of Credit Suisse's asset management arm in April of last year, taking the helm as head of the whole company in June of this year. He's part of the proverbial clean slate and highly experienced in the wealth management arena that's Credit Suisse's new priority. A distant light at the end of the tunnel The work's not done yet. As was noted, even by 2025, Credit Suisse still won't be entirely focused on investing and wealth management. The wind-down phase of its other ventures will also prove as expensive as it is complex. For example, while not officially a junk bond, the $5 billion raised via the sale of new debt earlier this month is costing the bank as much as 9%, nearing coupon rates that are considered high-risk "junk." The bank's Greensill debacle isn't fully in the past either. Greensill Capital is a supply chain financier that filed for bankruptcy in 2021, largely due to unpaid loans linked to the fallout from the pandemic. Since Greensill was largely backed by Credit Suisse, its implosion took a toll on the bank's bottom line. These outstanding loans are finally being addressed. Major Greensill and Credit Suisse borrower Liberty Steel Group just recently inked a preliminary debt-restructuring deal with debtholder Credit Suisse, as coal mining company Bluestone Resources and other borrowers did earlier this year. Given the amount of time that's passed since these loans were made and the fact that negotiations were required to settle them, however, it's not a stretch to suggest significant accommodations were made. Several Greensill investors are still mulling a lawsuit levied against Credit Suisse for its failures in the matter as well. On balance, though, the worst of the worst is in the rearview mirror. While it's distant, there's a light at the end of the tunnel. If Credit Suisse shares behave as most stocks of mid-overhaul companies do, it should start to reflect a brighter future before that future actually materializes. Fortune favors the bold It's hardly a risk-free choice, to be clear. It's still only an appropriate stock pick for risk-tolerant investors willing and able to give the bank at least five years to hammer out its turnaround plans. Expect lots of volatility in the meantime. If you can stomach such risk, Credit Suisse is a compelling prospect -- if only because nobody seems to like it now. As Warren Buffett put it, be "fearful when others are greedy, and greedy when others are fearful." There's certainly no shortage of fear here.

Apollo Interested in Another Credit Suisse Subsidiary- finews.com With NO VALUATION

After Credit Suisse sold its US securitization business to Apollo, another deal is said to be in the offing. The US investment firm has now agreed to acquire Sector Financial, a Credit Suisse subsidiary specializing in financing and lending to mid-sized companies, as «Bloomberg» reports citing people familiar with the matter. Sector Financial, headquartered in Chevy Chase, Maryland, outside of Washington DC, focuses on borrowers in industries such as healthcare and technology, offering loans ranging from $10 million to over $100 million. Its business portfolio also includes commercial mortgages and leveraged loans. Apollo operates a mid-market lending platform under the name MidCap Financial. Credit Suisse announced on Tuesday that it would sell a large part of its securitization business to Apollo. The New York-based private equity firm will also acquire most of the unit's employees. Radical Restructuring Yesterday, Credit Suisse said it is accelerating the radical restructuring of its investment bank by entering into «definitive transaction agreements» to sell what it says is a significant part of its securitized product group (SPG) to Apollo, as finews.com reported. The deal, along with the sale of other portfolio assets to third parties is expected to reduce the assets of the SPG from $75 billion to $20, billion according to the bank. The report did not give valuation details, and the companies declined to comment on the Sector Financial deal.

Credit Suisse Drops After SPG Sale to Apollo Leaves Questions- bloomberg com

Analysts point to lack of details in SPG asset sale to Apollo SPG sale is critical part of plans to cut investment bank risk Credit Suisse AG declined the most among major European banks after analysts pointed to the lack of financial details surrounding the agreed sale of a large part of its securitized products business to

Credit Suisse to Sell «Significant» Chunk of SPG- finews.com

As it continues its restructuring, Credit Suisse has agreed to sell a major chunk of its securitized products group to Apollo Global Management. It expects to release risk-weighted assets. Credit Suisse said it is accelerating the radical restructuring of its investment bank by entering into «definitive transaction agreements» to sell what it says is a significant part of its securitized product group (SPG) to Apollo Capital Management, the Swiss lender said in a statement Tuesday. The deal, along with the sale of other portfolio assets to third parties is expected to reduce the assets of the SPG from $75 billion to $20, billion according to the bank. Releasing RWAs Upon completing the transactions, a release of up to $10 billion of risk-weighted assets (RWA) is expected to be attained, according to the statement. Additionally, the $20 billion of remaining assets will generate income to support the exit from the SPG, to be managed by Apollo through a management relationship expected to last five years. Upon release of the RWAs, Credit Suisse is expected to strengthen its CET1 capital ratio, according to the statement. Headcount Moving Apollo is expected to hire the majority of the SPG team and will get help from Credit Suisse in transitioning employees to help ensure a seamless transition. Credit Suisse will also finance a porting of the assets that are transferred to Apollo. The deal is expected to close in the first half of 2023, subject to regulatory approvals, customer consent, and other customary closing conditions.

Teodoro Cocca: «Credit Suisse – Essential Lessons For All Bankers»- finenews

he turning point for many business downfalls is determined at the moment of their greatest success, as business strategy literature shows. Teodoro Cocca writes in his article for finews.first that every bank manager can draw fundamental lessons from the dramatic fall of the once high-flying Credit Suisse. This article has been published on finews.first, a forum for authors specializing in economic and financial topics. Like UBS over a decade ago, Credit Suisse laid the foundations for its near collapse during a phase when the bank appeared to be performing particularly well. In 2006, the best financial year in the company's history, UBS again sharply increased risks on its balance sheet. Shortly thereafter, this turned out to be a fatal miscalculation, born out of a phase of overconfidence and excessive ambition. Compared to the subsequent catharsis UBS had to endure, Credit Suisse management seemed to have done a lot right before and after the 2008 global financial crisis. Strengthened by its position as the leading bank in Switzerland at the time, Credit Suisse did not feel the need to make any decisive adjustments to its strategy. The business was going very well while other competitors were having problems. «As a successful manager, do not fall into complacency!» In this phase, Credit Suisse made its last big strategic mistake by incorrectly assessing the European trend toward a significant reduction in the capital intensity of investment banking. Why this did not happen was psychologically based on the arrogance-driven conviction of the bank's top managers that a strategic adjustment was unnecessary. The ever-lurking danger of overestimating oneself teaches all bankers that current success is by no means a reason not to constantly question one's strategy. Paradoxically, the greater the current success, the greater the danger of strategic blindness. As the literature on business strategy shows, the turning point for many business downfalls (including non-financial sectors) is determined at the moment of greatest success. As a successful manager, do not fall into complacency but, instead, always strive for critical reflection of your actions. Error analysis, which is conducted in the case of large losses or write-offs, is part of the usual procedure. Particularly when a bank must digest several large losses within a short period, top management and, above all, the board of directors will have to deal with the question of whether these are true one-off events or if there is a systemic and, thereby, a strategic element. «The board of directors should have recognized the deeply strategic nature of these losses» Credit Suisse insisted on strengthening its risk culture after the recent losses and much litigation and identified as the overarching cause of the losses. There is certainly nothing wrong with this, per se. But the enormous focus on risk culture, when looked at more deeply, exposes the view that problems were based on individual cases where more risk-aware employees would have acted differently. While true in an operational sense, it implicitly shifts the cause of error downwards rather than upwards in the hierarchy because it ignores the strategic dimension whether intentional or not. When a bank takes on individual risk positions dangerously related to the amount of equity, the question is whether the bank is in the right business areas, which is a strategic question. The board of directors, in particular, should have recognized the deeply strategic nature of these losses. Losses or failures must relentlessly lead to the right, strategic questions. That is what must be learned from this. «The lack of shareholder value orientation from the old structure is also visible in the new Credit Suisse» This leads to the following central management question: who should strategy serve when different divisions or business units are managed side by side on an equal footing? In a classic large bank, typically organized as a universal bank with many different business units, this question is of particular importance. In this context, it is remarkable how investment banking repeatedly succeeds in talking up its value-adding and indispensable contribution to serving major clients. But when it comes to adding shareholder value, it is usually very quiet. Investment banking seems to be an important and highly respected business segment on its own, but hardly for the other banking units. However, it is part of modern management practice to ask in-depth questions about synergy effects between different units and, if necessary, measure them. If none of this helps, then the tried and true concept of shareholder value can be resorted to about who creates long-term value for shareholders. A Credit Suisse that was truly focused on shareholder value would have had a very different business structure a long time ago. This applies to quite a few other banks as well. Incidentally, the lack of shareholder value orientation from the old structure is also visible in the «new Credit Suisse,» with the prospect of an independent investment banking unit shrugged off by shareholders and other business units. «It could have been done much earlier and from a position of strength» No more talk of eliminating synergies in serving major customers. This is a late, disheartening confession from the investment bankers, that they are and always have been a very independent bank within the bank. That the very investment bankers, the preachers of shareholder value, have undermined the management of the bank according to this is a sinful betrayal of the «biblical» principles in the world of investing. The strategic steps that Credit Suisse announced on October 27 this year are an outright revelation of its transgressions. All the plans developed after intense and months-long wrangling have one thing in common: it could have been done much earlier and from a position of strength. This would very likely have even added real value for shareholders. But it was only under extreme pressure that the bank was able to bring itself to take the measures that had been strategically demanded long before. From a management perspective, it can be worthwhile for every banker to conduct a thought experiment in a crisis to consider what would ultimately be necessary if the situation were to escalate completely. This can help determine which seemingly unavoidable decisions have to be made early and at least do so from a relative position of strength. The pressure became unbearably great at the moment when the international private bank and Swiss business were swept up in a reputational maelstrom and found themselves under threat. «The current situation can be relentlessly described as what it is today: a restructuring case» Structuring a company on a principle so that non-essential business units threaten the core business is tantamount to ignoring simple, strategic principles. It may seem trivial but interestingly, both major Swiss banks got themselves into extreme distress precisely by ignoring such trivialities. In both cases, it was losses in non-core businesses that sent the broader group into a tailspin. In the case of Credit Suisse, in particular, the time dimension should also be emphasized. The events of the past few years were characterized by a long period of, more or less, inaction as the bank slid into ever greater difficulties. The longer a decline lasts in the particularly sensitive banking business, the more the management loses its ability to act. The current situation with Credit Suisse can be relentlessly described as what it is today: a restructuring case. The capital increase under such unfavorable conditions is the price to pay for the lack of entrepreneurial capacity to act. Probably the most important lesson for all bank managers with leadership responsibilities is the restructuring of Credit Suisse was not simply the result of external, unfortunate circumstances that unexpectedly and suddenly befell the company. No, it is quite the opposite: a series of negative events occurred, extending over a longer period, from which repeatedly wrong or, at least, non-essential conclusions were drawn. In other words, a series of management mistakes at the executive level and strategic misjudgments by the board of directors. «This is the most essential lesson that every banker should take away from the Credit Suisse case» One way of reading the situation is ominous because the events surrounding Credit Suisse can befall any company and its decision-makers. But another way to see it as reassuring is to recognize the management mistakes because it shows in hindsight that the bank could be in a very different position today if important decisions had been made earlier or differently. This is the most essential lesson that every banker should take away from the Credit Suisse case. Managers with leadership responsibilities can achieve a great deal if they align their tasks with recognized leadership principles and act prudently, courageously, and consistently in difficult moments. This is, after all, the manager's «raison d’étre». Teodoro D. Cocca has been Professor of Asset and Wealth Management at Johannes Kepler University Linz since 2006. Before that, he worked for several years at Citibank in both investment and private banking, conducted research at the Stern School of Business in New York, and taught at the Swiss Banking Institute in Zurich. In addition, the Swiss with Italian roots is an associate professor of private banking at the Swiss Finance Institute (SFI) in Zurich and acts as a consultant for financial companies and public authorities in Switzerland and abroad.

Credit Suisse in summary : Good luck

-Capital raise 4 Billions - -Two new bonds 4 billions, one with coupon over 9% and one 7,75% - Market Cap : 10,6 billions cds5year over 300 And if we summarise : Bank said that they need 4 Billions and they will get 8 billions, the 75% of the market cap ! ------------------------------------------------------------------- 400 bn at call liabilities - 900 bn leverage exposure and cash 160 bn + 8 bn

Credit Suisse Faces Fresh Pressure Over Untaxed Americans - Wall street journal

Credit Suisse CS -4.07% Group AG pleaded guilty in 2014 to conspiring to help thousands of Americans cheat on their taxes. Eight years later, a set of problematic customer accounts still haunts the bank. U.S. Justice Department officials have found deficiencies in the bank’s handling of its 2014 plea agreement, according to people familiar with the case. In a sign of the seriousness the bank places on the tax case, new general counsel Markus Diethelm attended recent meetings with the DOJ to give personal pledges toward reaching a resolution. The re-emergence of the tax cheating case is the latest challenge for the Swiss lender’s new management team, which is working on an overhaul and recapitalization. Financial losses, scandals and lawsuits battered Credit Suisse over the past two years. Credit Suisse’s lawyers have told the Justice Department that they want to turn a corner and to demonstrate the bank’s compliance, according to the people familiar with the case. In addition to the DOJ case, the Senate Finance Committee started a probe last year and is expected to release a report in the coming weeks highlighting tax-related problems that continued at Credit Suisse after 2014. “Credit Suisse is in regular contact with the DOJ to report on the post-plea account remediation work undertaken pursuant to the bank’s 2014 plea,” a bank spokeswoman said. “The bank has devoted substantial resources to these efforts and is committed to a continuous improvement culture regarding compliance.” A Justice Department spokeswoman declined to comment. NEWSLETTER SIGN-UP The 10-Point. A personal, guided tour to the best scoops and stories every day in The Wall Street Journal. PREVIEW SUBSCRIBE Credit Suisse is at a delicate moment in its 166-year history. Later this month, shareholders are expected to approve a $4 billion capital call from investors. The bank said it would cut 9,000 jobs, spin off its investment bank and sell whole business lines. Shares in the bank remain depressed and its executives’ nerves are raw after an internet frenzy in September questioned Credit Suisse’s health. The restructuring is meant to heal wounds, especially the $5 billion loss from the collapse of Archegos Capital Management in spring 2021. The bank’s new general counsel, Mr. Diethelm, who joined from rival UBS Group AG, is seeking to clear the bank’s substantial legal troubles. Earlier this year, Credit Suisse was ordered by a Bermuda court to pay $607 million to a billionaire former client, who sued for breach of contract and fiduciary duty after his private banker made unauthorized stock bets. Mr. Diethelm attended a second trial in Singapore in September, at which Credit Suisse’s Singapore trust unit admitted breaching its duties. The tax case was mostly resolved years ago. Credit Suisse agreed in 2014 to root out and shut any remaining undeclared accounts, following a purge. It paid $2.6 billion to settle the matter with the Justice Department and other authorities, and for years had a monitor on-site acting for New York’s Department of Financial Services. It promised to provide the DOJ with information on the accounts it shut and where the money went next. Failing to do so left it open to further punishment. Unlike some other agreements made between prosecutors and companies, that promise—a kind of corporate probation—doesn’t have an end date. Bank executives hope the current talks could lead to the probation ending. Credit Suisse and the Justice Department haven’t discussed further monetary penalties, the people familiar with the case said. Justice Department officials have questioned the bank about hundreds of millions of dollars in accounts belonging to U.S. citizens that the bank closed soon after its guilty plea, but didn’t immediately report, according to the people familiar with the case. That gave some taxpayers scope to move their accounts elsewhere undetected. The department is also concerned that Credit Suisse didn’t implement uniform policies globally to make sure bank employees handled such accounts appropriately, according to the people. Bloomberg News previously reported details of the Justice Department’s investigation. The Justice Department under the Biden administration has cast a sharper eye on allegations of misconduct at companies after they admit to crimes. Deputy Attorney General Lisa Monaco said last year that prosecutors would take a tougher stance on companies with long rap sheets. This year, the department has taken other steps highlighting a more aggressive approach to white-collar crime. For decades, Swiss banks were seen as fortresses to store untaxed assets with ultimate secrecy. Swiss bankers ferried money to American customers at discreet meetings in airport lounges and resorts, and opened offshore trusts for them to avoid detection by the Internal Revenue Service. In the 2000s, U.S. authorities launched multiple probes of Swiss banks, leading to a slew of criminal and civil actions. To avoid its banks being shut out of the U.S. financial system, Switzerland agreed they could share information on American account holders. Shortly after Credit Suisse agreed to the 2014 settlement, a former employee alleged to the Justice Department that Credit Suisse was still concealing accounts. In 2016, a University of Rochester professor pleaded guilty to amassing $200 million that wasn’t declared to the IRS. In a lawsuit last year filed in federal court in Virginia, the former Credit Suisse employee claimed the bank continued to conceal some Americans’ assets after the plea agreement, which the employee said defrauded the U.S. government. The lawsuit was an unusual one, brought under a law that is used to combat fraud in government contracting and healthcare programs. The ex-employee, a former banker on Credit Suisse’s Israel desk in Zurich, was unnamed in the case. The DOJ asked for the lawsuit to be dismissed, saying it could interfere with continuing discussions with Credit Suisse about remaining Swiss accounts held by U.S. citizens. The bank didn’t respond to the lawsuit before a judge dismissed the case. A lawyer for the former employee, Jeffrey Neiman, said his client is hopeful that the Justice Department holds Credit Suisse to account over the matter. The bank declined to comment on the ex-employee’s allegations. Write to Margot Patrick at margot.patrick@wsj.com and Aruna Viswanatha at aruna.viswanatha@wsj.com Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8 WHAT TO READ NEXT...

Credit Suisse set to raise $5 bln from two new debt issues- reuters

LONDON, Nov 9 (Reuters) - Credit Suisse (CSGN.S) was set to raise a total of $5 billion from two debt sales on Wednesday but was forced to pay up to attract investors after a string of scandals and a broader rise in market borrowing costs. Reporting by Chiara Elisei and Yoruk Bahceli; editing by Dhara Ranasinghe, Kirsten Donovan