Credit Suisse announced plans for a “comprehensive” review of its businesses as the troubled Swiss bank installed Ulrich Körner as chief executive and slumped to a far larger second-quarter loss than expected.
Körner, who heads Credit Suisse’s asset management business, will take over from Thomas Gottstein, who is stepping down after leading the bank through one of the most tumultuous periods in its 166-year history.
The strategic review, the bank’s second in less than a year, would reduce the importance of the investment bank and significantly cut costs, Credit Suisse said on Wednesday.
“Our goal must be to become a stronger, simpler and more efficient group with more sustainable returns,” said chair Axel Lehmann.
The bank reported a pre-tax loss of SFr1.6bn ($1.7bn) for the first half of 2022 after revenues dropped 36 per cent compared with the same period a year earlier. The loss was significantly higher than the SFr206mn analysts had expected.
“Our results for the second quarter of 2022 are disappointing, especially in the investment bank, and were also impacted by higher litigation provisions and other adjusting items,” said Gottstein, who added that he was leaving “for personal and health-related considerations”.
Credit Suisse set aside SFr434mn of provisions for litigation, which it said included potential losses tied to US regulatory investigations into the use of personal messaging tools to communicate with clients. Several Wall Street banks have set aside hundreds of millions of dollars over the matter.
Last month, Credit Suisse issued a profits warning — the bank’s third of the year — saying market volatility had pushed back its recovery. It also said it would accelerate cost-cutting measures.
The bank’s shares hit a three-decade low this month, and at SFr5.16 are down more than 40 per cent this year.
The appointment of Körner as group chief executive was reported by the Financial Times on Tuesday night.