Credit Suisse weighs splitting investment bank into three

BENGALURU - Credit Suisse Group has drawn up plans to split its investment bank in three, the Financial Times reported on Thursday, as the Swiss lender attempts to emerge from three years of relentless scandals.

Under proposals to the board, the investment bank is looking to sell profitable units such as its securitised products business to prevent a damaging capital raise, the report said, citing people familiar with the plans.

The bank did not respond to a Reuters request for comment.

The proposals could see the bank split into three parts: the group's advisory business, which might be spun off at some later point; a "bad bank" to hold high-risk assets that will be wound down, and the rest of the business.

"We have said we will update on progress on our comprehensive strategy review when we announce our third-quarter earnings," the newspaper report quoted Credit Suisse as saying. "It would be premature to comment on any potential outcomes before then."

Chairman Axel Lehmann had appointed Dr Ulrich Korner as chief executive officer in the summer with a brief to carry out a radical shake-up of the bank, which has been hit by a corporate spying scandal, investment fund closures, a record trading loss and a litany of lawsuits in recent years, the report said.

Reuters reported earlier in September that Credit Suisse was also looking to cut around 5,000 jobs, about one position in 10, as part of a cost-reduction drive.

In May, Reuters said the bank was in the early stages of weighing options to bolster its capital after a string of losses had eroded its financial buffers.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on September 23, 2022, with the headline Credit Suisse weighs splitting investment bank into three. Subscribe