Switzerland’s second largest bank Credit Suisse is seen here next to a Swiss flag in the center of Geneva.
Fabrice Coffrini | AFP | Getty Images
Swiss credit is seeing a sharp reduction in customer flows as the struggling Swiss lender moves forward with its major strategic overhaul, new CEO Ulrich Koerner told CNBC on Wednesday.
The bank in November projected a loss of $1.6 billion in the fourth quarter after announcing a series of measures to address persistent underperformance in its investment bank and a series of risk and compliance failures. It also disclosed at the time that it had continued to experience significant net assets.
“The outflows, as we said, have slowed down very significantly and we’re now seeing money coming back into different parts of the firm,” Koerner said on the sidelines of the World Economic Forum in Davos, Switzerland.
As part of the overhaul, Credit Suisse shareholders in November gave the go-ahead for a $4.2 billion capital raising, including a new private equity offering that will see Saudi National Bank become the largest stakeholder, with a 9.9% stake .
Koerner said the transformation towards a “new Credit Suisse” was going well.
“We laid out a very clear plan and we talked to all different stakeholder groups over the last three months, as you would expect,” he said.
“I think the plan, the strategy resonates very well. We are in full swing with the implementation, so I think we are making very good progress.”
Credit Suisse has also reached out to tens of thousands of customers in Switzerland and around the world for feedback, Koerner said.
“It has generated very positive momentum and I think this is momentum that will stay with us through 2023,” he added.
“Zero concerns” over the acquisition of Klein’s business
Koerner confirmed that the reported departure of 10% of Credit Suisse’s investment bankers in Europe was part of previously announced plans to cut 2,700 jobs by 2023 and reduce headcount by a total of 9,000 by 2025.
As part of the overhaul, Credit Suisse will spin off and rebrand its US investment banking division as CS First Boston. The new entity will be headed by former Credit Suisse board member Michael Klein. Credit Suisse is reportedly on the verge of buying Klein’s boutique investment advisory firm.
Koerner insisted he had “zero concerns” about conflicts of interest, stressing that the bank could handle the situation “in the utmost professional manner”.
“I’m really looking forward to Michael joining because Michael is an excellent banker, he’s an excellent deal maker, and he’s very entrepreneurial, and that’s why I want to go on a journey with him.”
US investor Harris Associates has more than halved its stake in Credit Suisse since June 2022. Koerner said he could not judge the firm on the timing, but “we will certainly have discussions”.