Switzerland’s second largest bank, Credit Suisse, is seen here next to a Swiss flag in downtown Geneva.
Fabrice Coffrini | AFP | Getty Images
Credit Suisse is seeing a sharp drop in client outflows as the ailing Swiss lender presses ahead with its major strategic overhaul, new CEO Ulrich Koerner told CNBC on Wednesday.
The bank in November forecast a $1.6 billion loss for the fourth quarter after announcing a series of measures to address its investment bank’s ongoing underperformance and a series of risk and compliance failures. She also revealed at the time that she had continued to experience significant net worth outflows.
“As I said, the outflows have come down very sharply and we are now seeing money flowing back into different parts of the company,” Körner said on the sidelines of the World Economic Forum in Davos, Switzerland.
As part of the makeover, Credit Suisse shareholders in November gave the green light to a $4.2 billion capital increase, including a new private equity offering in which the National Bank of Saudi Arabia has a 9.9% stake becomes the largest shareholder.
Körner said the transformation to a “new Credit Suisse” is going well.
“We’ve put in place a very clear plan and we’ve been talking to all the different stakeholders over the last three months, as you would expect,” he said.
“I think the plan, the strategy resonates very well. We’re in full swing so I think we’re making really good progress.”
Credit Suisse has also solicited feedback from tens of thousands of clients in Switzerland and around the world, Koerner said.
“It’s created a very positive momentum and I think that’s a momentum that will see us through to 2023,” he added.
“No concerns” about small business acquisition
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 cut a total of 9,000 jobs by 2025.
As part of the makeover, Credit Suisse will spin off its US investment banking division and rename it CS First Boston. The new unit 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.
Körner asserted that he had “zero concerns” about conflicts of interest and emphasized that the bank could deal with the situation “very professionally”.
“I’m really looking forward to Michael because Michael is an excellent banker, he is an excellent dealmaker and he is very entrepreneurial, so 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 couldn’t judge the firm on its timing, but “we will certainly have talks.”