Credit Suisse names new CEO as losses widen significantly

Credit Suisse named a new chief executive officer on Wednesday, as it reported a much deeper loss than was expected in the second quarter.

The Swiss banking giant said net losses in the three months through June totalled CHF 1.59bn (£1.37bn), much wider than consensus forecasts for a CHF 206m loss.

It was also a serious swing from the CHF 253m net income it recorded in the second quarter last year.

Assets under management fell to CHF 1.45trn from CHF 1.63trn year-on-year, while adjusted pre-tax losses swung to CHF 442m from CHF 1.31bn

“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 current chief executive officer Thomas Gottstein.

“The bank’s performance was significantly affected by a number of external factors, including geopolitical, macroeconomic and market headwinds.

“These challenging circumstances led to results which overshadow the strength of our leading client franchises in all four divisions of the bank.”

Gottstein said the “urgency for decisive action” was clear, adding that a “comprehensive review” to strengthen the firm’s pivot to the wealth management, Swiss bank and asset management businesses, supported by a “fundamental transformation” of its investment bank, was underway.

“Further, we have now launched a broader cost efficiency and digital transformation program to reduce our absolute cost base to less than CHF 15.5bn in the medium term.”

At the same time, Credit Suisse named asset management chief Ulrich Koerner as its new chief executive, succeeding Gottstein on 1 August.

According to Reuters, Koerner headed up UBS Asset Management between 2014 and 2019, and was an advisor to its CEO from 2019 to 2020.

It added that he previously served as a senior executive at Credit Suisse Financial Services, also running its Swiss business.

“Today marks a leadership change for Credit Suisse,” Thomas Gottstein said.

“It has been an absolute privilege and honour to serve Credit Suisse over these past 23 years.

“As a leader, since joining the executive board in 2015, I was focused on delivering results and embracing our values, including partnership, accountability and integrity.”

At 1424 CEST (1324 BST), shares in Credit Suisse Group were up 1.28% in Zurich at CHF 5.22.

Reporting by Josh White at Sharecast.com.