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OPINION

Credit Suisse’s problem is not its investment bank

The market is awash with speculation over what Credit Suisse might do in its latest strategic reset, and what the future is for its perennially underperforming investment bank. But as talk mounts of radical cuts to come in that division, the real challenge lies elsewhere.

Mark Baker on investment banking 1920px

A new C-suite has been appointed, senior managers have been reshuffled and the rumour mill is growing by the day; Credit Suisse is getting its ducks in a row two months before announcing the results of its latest strategic review, alongside third-quarter earnings on October 27.

This week saw the announcements of Dixit Joshi as chief financial officer and Francesca McDonagh as chief operating officer, rounding out the senior team of new chief executive Ulrich Körner. Appointed in late July to replace Thomas Gottstein, Körner immediately announced a new “comprehensive” strategic review of the bank.

Credit Suisse has certainly been talking the talk: the new review will go beyond last year’s; it will strengthen its wealth management franchise; it will transform its investment bank into something capital-light and advisory-led.

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Ulrich Körner, Credit Suisse

But as for walking the walk, that remains to be seen.

Let’s wind the clock back for a moment to last year’s somewhat half-baked strategic review under previous chairman António Horta-Osório that followed the Archegos fiasco.

One option not even considered then might have been to throw everything at building a proper investment bank, as opposed to the half-hearted effort that has characterised the period since the departure of another previous chief executive, Tidjane Thiam, in 2020.

Instead,


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