Investment banking giant Credit Suisse suffers a $ 440 million reorganization, abandoning its blue-chip brokerage unit and cutting back on its investment banking services after major losses from the collapse of hedge fund Archegos and financial services firm Greensill, and a number of sanctions related to scandals.
In his earnings On Thursday, the Swiss bank said it would focus on its wealth management business, after a 9% year-on-year increase in assets under management, totaling $ 923 billion (843 billion Swiss francs).
Credit Suisse posted third-quarter profit before tax of CHF 1 billion ($ 1.09 billion), while profits fell 21% from the same period in 2020, to CHF 434 million Swiss ($ 475 million).
The bank’s restructuring will see it split into four units from next year: Asset management, Wealth Management, the Swiss bank and the Bloomberg investment bank. reports.
Credit Suisse, a creditor to the failure of Greensill Capital, suffered further damage to its reputation when the Australia and UK-based financial services company went bankrupt, pushing the bank to freeze billions in investment funds, while the bank was also fined $ 475 million for a corruption scandal involving Mozambique’s “tuna bonds”.
The restructuring is expected to take place over three years, according to the WSJ.
Burned by the consecutive scandals, the new president of Credit Suisse, Antonio Horta-Osorio, announced in April the overhaul of the bank. Credit Suisse was one of the hardest hit banks, along with other big hitters such as Morgan stanley and Nomura also reported billions of losses due to the implosion of Archegos. Wall Street has recorded a total of more than $ 10 billion in losses related to the little-known and secret New York-based hedge fund. The crisis was sparked after Archegos defaulted on margin calls, triggering a $ 30 billion discount sale from the media and entertainment companies in which it had invested.
The company behind the $ 30 billion fire that rocked financial markets has revealed next to nothing (Forbes)