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 facts as they are (though they change by the day) are worth repeating. On March 1, Credit Suisse said it would suspend $10 billion worth of funds linked to Greensill, citing “considerable uncertainties” over their valuation.
