With Ulrich Koerner taking over as chief executive officer, Credit Suisse Group AG’s top ranks are looking more like UBS Group AG, suggesting the firm may draw from its crosstown rival’s play book.
The 59-year-old will replace Thomas Gottstein, who is resigning after a two-year tenure marked by scandal, turmoil and huge losses. Both Koerner and Credit Suisse Chairman Axel Lehmann joined the bank last year after stints at UBS, which has pursued a more conservative strategy that leaned away from the trading business.
Credit Suisse on Wednesday said it aims to slash the size of its investment bank in the face of mounting losses, something UBS did a while ago. The firm, which posted a larger-than-expected 1.59 billion franc ($1.65 billion) second quarter loss, said it will seek to cut at least another 1 billion francs of costs and evaluate its securitized products trading unit.
Credit Suisse’s decision “to transform the investment bank into a capital-light, advisory-led banking business, seems to be similar to the strategy adopted by UBS in 2012,” Citigroup analysts wrote in a note to investors. Koerner’s appointment “would seem to suggest a further departure from investment banking.”
In the decade Lehmann and Koerner were at UBS, the firm pivoted more aggressively away from fixed-income trading and toward wealth management than its rival. UBS’s market cap is now almost four times that of Credit Suisse, whereas they were almost identical in the years immediately after the financial crisis.
Scandals, Losses
Lehmann is seeking to steer Credit Suisse back to profitability -- and stability -- after scandals such as the blow-up of Archegos Capital Management and Greensill Capital eroded investor confidence, weakened key businesses, and prompted an exodus of talent. The Swiss lender has changed its entire executive team and half its board of directors in the past 18 months in an effort to move past the crises.
Asked in a Bloomberg TV interview if the bank is now more vulnerable than ever to a takeover, Lehmann said: “no I don’t believe so. I think we have really strong businesses, great people and a great franchise and we need to reposition ourselves and speed up the transformation.”
Credit Suisse has spent the past three years mired in scandals -- starting with a spying fiasco that led to Gottstein taking the reins from Tidjane Thiam -- that has left it floundering at a time when many rivals have seized on active markets to thrive. Now with inflation fears and the war in Ukraine spurring more turbulence, Credit Suisse losses have totaled almost 4 billion francs in the past three quarters.
“Ulrich has experiences to transform and to build large businesses,” Lehmann said. “He’s one of the very few executives in the whole industry that can deliver. He’s ideally positioned.”
Koerner, who is currently Credit Suisse’s asset-management head, has spent more than 20 years at the two largest Swiss firms. He spent over a decade at Credit Suisse before moving in 2009 to UBS, where he worked with Lehmann. Koerner rejoined Zurich-based Credit Suisse last year after losing out in a management reshuffle at UBS in 2019.