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OPINION

Greensill: Gottstein’s latest Credit Suisse headache

Thomas Gottstein’s first year in charge of Credit Suisse began with a pandemic. The second has been overshadowed by events surrounding a key client, Greensill Capital, whose collapse revives lingering questions about the bank’s operating model.

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Many years ago, over a beer at the Kerry Centre hotel in Beijing, a senior US diplomat described diplomatic talks with North Korea as an “endless dizzy dance”. One step forward, he said, led to another sideways, two more back, then a fifth into “somewhere you’d never been before”.

Thomas Gottstein must know the feeling well. Within days of being announced as Credit Suisse’s chief executive in February 2020, a pandemic made landfall in Europe.

The crisis left the 57-year-old unable to travel and meet staff. Last year was a tough one for the Swiss banking giant, with defaults and write-offs from troubled loans tripling to SFr1.1 billion ($1.18 billion). Net income fell 22% year-on-year in 2020, to SFr2.7 billion, with net litigation provisions topping SFr1.2 billion.

If Gottstein hoped for an easier run in 2021, with a swift return to operating normality, he didn’t get it.

Reputational harm

The collapse of Greensill Capital – the Softbank-funded supply chain finance specialist – has already caused Credit Suisse sizeable reputational and financial harm.

The