How Credit Suisse has evolved over 167 yrs
Credit Suisse Group, a Zurich-based bank, is currently experiencing a massive restructuring as a result of years of management changes, financial losses, and scandals. This timeline gives information about the 167-year history of Credit Suisse, which includes several victories and battles that have molded its present situation. Swissische Kreditanstalt (SKA), the predecessor of Credit Suisse, was founded in 1856. In 1870, it established its first overseas representative office in New York. With continued growth, the bank became the first Swiss bank to be listed on the New York Stock Exchange. In 1988, CS Holding, a sibling firm of SKA, bought 45% of First Boston and changed its name to CS First Boston.
The business kept expanding through acquisitions, notably the 1990s purchases of Swiss private bank Bank Leu and American investment bank CS First Boston. The bank acquired the asset management division of Warburg, Pincus & Co. in 2000, and Donaldson, Lufkin & Jenrette (DLJ), a Wall Street firm, a year later.
Credit Suisse was not, however, exempt from scandals. The Chiasso Affair money-laundering incident caused a record loss and drove the bank to become an international financial organization in 1977, prompting the change. 2020 saw the departure of CEO Tidjane Thiam owing to a scandal involving the bank’s secret surveillance tactics, while the collapse of the US investment company Archegos resulted in a $5.5 billion loss. The bank was forced to freeze $10 billion in supply chain finance funds connected to the bankrupt British financier Greensill Capital in the same month.
Credit Suisse launched a new strategic assessment in July 2022 and appointed restructuring specialist Ulrich Koerner as CEO to succeed Thomas Gottstein. The bank revealed a comprehensive strategy to refocus on banking for the wealthy in October 2022, which included a $4 billion capital raise, 9,000 job cuts by the end of 2025, and the separation of its investment bank to form CS First Boston.
When “significant flaws” in internal controls over financial reporting were found in the bank’s 2022 annual report in March 2023, the situation took a turn for the worst for the institution. Shares of the bank fell by as much as 30% after its major stakeholder, Saudi National Bank, stated that regulatory restrictions prevented it from providing additional help. Credit Suisse became the first significant international bank to get emergency funding since the 2008 financial crisis when it received a $54 billion lifeline from the Swiss central bank to help stabilize liquidity.
According to reports, new deals involving Credit Suisse or its assets are being restricted by a number of large institutions, including Societe Generale SA and Deutsche Bank AG. Meetings are being held over the weekend by Credit Suisse CFO Dixit Joshi and his teams to discuss potential strategic directions for the bank.
In the past, Credit Suisse has had both successes and controversies. The bank has had both successes and failures, but it has also overcome many obstacles and is still growing today. With the help of the Swiss central bank and its most recent restructuring plan, there is optimism for a better future. Yet whether Credit Suisse can regain its footing and win back the confidence of its clients and investors will only become clear with time.