Credit Suisse shares rise after CEO transition, cost-cutting plans announced (NYSE:CS)
Credit Suisse Group (New York Stock Exchange: CS) ADS are up 3.6% Wednesday ahead of U.S. commercialization after the Swiss bank said it was replace its CEO, launching a comprehensive review of its operations and bringing absolute costs down to less than 15.5 billion francs ($16.1 billion).
“Our The goal must be to become a stronger, simpler and more efficient group with more sustainable returns,” said Chairman Axel Lehman.
On an adjusted basis, the company job a pre-tax loss of 442 million francs in the second quarter of 2022, compared to a pre-tax profit of 300 million francs in the first quarter and a pre-tax profit of 1.31 billion francs in the second quarter of 2021. Not only was the bank faces challenging economic and market conditions, but continues to address legal issues, including compliance issues regarding record retention. On a reported basis, its pre-tax loss in Q2 was 1.17 billion francs.
Ulrich Körner will become Group CEO on August 1, 2022, succeeding Thomas Gottstein, who is stepping down after serving in the role for two years. During his tenure, the bank suffered the two collapses of Greensill Capital and Archegos, which resulted in billions of dollars in losses.
Körner joined Credit Suisse (CS) in April 2021 as CEO of Asset Management. He joined rival Swiss bank UBS Group (UBS), where he led the asset management division for six years. Prior to that, he was Chief Operating Officer.
A pillar of the strategic review will be to create a small-cap, advisory-focused banking business and a more focused capital markets business that complements the growth of CS’s wealth management and Swiss bank franchises. . The bank will assess options to “propel the next stage of growth of our market-leading securitized product platform and other related funding businesses,” the company said.
David Miller and Michael Ebert will become co-heads of investment banking, with Miller running the bank and Ebert overseeing the markets. Christian Meissner, CEO of Investment Bank, will focus on the strategic transformation of the company.
The bank’s Board of Directors and senior management have also launched a program to lower the Group’s absolute cost base to less than CHF 15.5 billion in the medium term, given the difficult economic and market environment. . Credit Suisse (CS) aims to generate savings in the Technology and Operations function to improve scalability and continue its digital transformation, the bank said.
Tuesday, the the wall street journal announced that Gottstein would leave as CEO. Previously, Credit Suisse Group AG (CS) Reports Second Quarter Results and Announces CEO Transition