Credit Suisse is a global financial services company based in Switzerland. The company was founded in 1856 and has since grown into one of the world’s largest banking and financial services organizations.
Credit Suisse operates in three main business divisions: Investment Banking, Private Banking, and Asset Management. The Investment Banking division offers a range of services including advisory services for mergers and acquisitions, underwriting of debt and equity securities, and other investment banking services. The Private Banking division offers wealth management services to high-net-worth individuals and families, while the Asset Management division manages investments for institutional and retail clients.
Credit Suisse has a strong presence in Switzerland but also operates in other countries around the world, including the United States, Europe, Asia, and the Middle East. The company is publicly traded on the Swiss stock exchange and also has listings on other international exchanges. In recent years, Credit Suisse has faced some challenges, including legal and regulatory issues and financial losses. The company has undertaken various measures to address these challenges and improve its performance, including restructuring its business and reducing costs.
Why has Credit Suisse reached the crisis point?
1. Credit Suisse ranks among the world’s largest wealth managers and crucially it is one of 30 global systemically important banks, whose failure would cause ripples through the entire financial system.
2. The sell-off in Credit Suisse’s shares began in 2021, triggered by losses associated with the collapse of investment fund Archegos and Greensill Capital.
3. In January 2022, Antonio Horta-Osorio resigned as chairman for breaching COVID-19 rules, just eight months after he was hired to fix the ailing bank.m
4. In July, new CEO and restructuring expert Ulrich Koerner unveiled a strategic review – but failed to win over investors. An unsubstantiated rumour on an impending failure of the bank in the autumn sent customers fleeing.
5. Credit Suisse confirmed in February that clients had pulled 110 billion Swiss francs ($119 billion) of funds in the fourth quarter while the bank suffered its biggest annual loss of 7.29 billion Swiss francs since the financial crisis.
6. On Wednesday, Saudi National Bank, the bank’s top backer, told reporters it could not give more money to the bank as it was constrained by regulatory hurdles, while saying it was happy with the bank’s turnaround plan.
7. Credit Suisse was thrown a $54 billion lifeline by the Swiss central bank on Thursday to shore up liquidity after a slump in its shares and bonds intensified fears about a global banking crisis
The way forward: The Swiss National Bank and Swiss regulator FINMA have told their international counterparts they regard a deal with UBS Group as the only way to prevent a collapse in confidence in Credit Suisse Group.
– CA Aniket Kulkarni
