Beautiful Virgin Islands

Tuesday, Sep 16, 2025

Credit Suisse has stumbled from one crisis to another - but the panic is possibly overdone

Credit Suisse has stumbled from one crisis to another - but the panic is possibly overdone

Senior executives at the bank appear to have spent most of the weekend trying to reassure clients and investors of its financial health, according to a report.

It never rains but only pours at Credit Suisse.

Switzerland's second largest lender has stumbled from one crisis to another in recent years.

There was the corporate spying scandal three years ago in which the bank was accused of hiring a private detective after one of its former executives had defected to a rival.

Shortly afterwards, the bank lost $5.5bn from its exposure to the collapsed hedge fund manager Archegos Capital, while it also suffered losses related to the collapse of the supply chain finance group Greensill Capital.

Other embarrassments included a string of fines for making fraudulent loans - nicknamed 'tuna bonds' - to the government of Mozambique between 2012 and 2016.

After these various setbacks Credit Suisse appeared to have pulled off a considerable coup when, in April 2021, it hired Antonio Horta-Osorio, the highly regarded former chief executive of Lloyds Banking Group, to become its new chairman. Investors were delighted when he promised to rebuild the bank's reputation.

Unfortunately, in January this year, he was forced to resign after an internal investigation revealed he had broken COVID quarantine rules to attend the Wimbledon tennis championships and had also used the bank's private jet to take a holiday to the Maldives.

He was followed out of the door in July this year by Thomas Gottstein, the chief executive, who resigned for what he described as "personal and health-related considerations".

His successor Ulrich Korner, the bank's fourth chief executive in just 17 years, has promised a major restructuring announcement before the end of the month in an attempt to cut costs and stem the flow of red ink that has characterised recent results.

The bank has reported a loss in five of the last seven quarters and in each of the last three due, chiefly, to issues in its investment banking division.

Ulrich Korner, the bank's fourth chief executive in just 17 years


Mr Korner, nicknamed 'Uli the Knife' for his cost-cutting prowess, ought to have represented a clean break with the past.

Unfortunately, according to the Financial Times, he appears to have spent most of the weekend - along with other senior executives at the bank - trying to reassure clients and investors about the bank's financial health.

Mr Korner sent an internal memo to colleagues on Friday afternoon, which promptly leaked, in which he urged them to "remain focused amid the many stories you read in the media" and told them not to confuse the bank's weak share price performance - the shares are down 61.5% so far this year following a 5% decline this morning - with its "strong capital base and liquidity position".

That does not appear to have calmed nerves over the bank's financial health.

Apart from the latest lurch in Credit Suisse's share price to a new all-time low - the bank is now valued at less than its book value - there has been a spike in credit default swaps (the instruments investors use to insure themselves against a potential default) of Credit Suisse. Rumours abound that the bank is also preparing to tap investors for capital.

Is the panic being overdone? Possibly. Credit Suisse has a reasonably strong capital position and certainly one that bears no comparison with those of the lenders that collapsed or required rescuing during global financial crisis.

It is why various market commentators have been at pains today to stress that this does not appear to be a so-called 'Lehman moment'.

But it is a fact that Credit Suisse's funding costs have risen, gnawing away at its profitability, following downgrades in its credit rating.

The irony is that Mr Gottstein and his predecessor at Credit Suisse, the much-respected former Prudential chief executive Tidjane Thiam, had done much work to try and reshape Credit Suisse following the financial crisis.

A conscious decision was taken, with the backing of the Swiss government, to reduce the size of the lender's investment banking division and to focus on wealth management.

But the scandals have kept on coming. Shortly before Mr Gottstein resigned, the bank became the first Swiss domestic lender to be fined for a corporate crime, its punishment relating to its failure to stop money laundering by Bulgarian drug dealers between 2004 and 2008.

The woes of this bank matter. Credit Suisse, whose ambassadors include the tennis superstar Roger Federer, is one of just 30 lenders on the list of 'Global Systemically Important Banks' published by the Financial Stability Board (the multinational body that promotes global financial stability) which means, in the terminology adopted around the time of the financial crisis, that it is too big to fail.

It is also a huge employer in the UK. Of the bank's 45,000 employees globally some 6,000 are here, the majority working at its offices at Canary Wharf, which are also home to an art collection that reflects the bank's lavish patronage of the sector.

It seems highly likely that if the restructuring planned by Mr Korner is as radical as is being rumoured - and as radical as those shareholders who may be tapped for cash are demanding - then the bank may be employing somewhat fewer people in both London and New York in the near future.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
×