Credit Suisse's misguided re-re-shuffle

By:
Abigail Hofman
Published on:
Dougan, cs
I have lost count of how many senior management re-organizations Brady Dougan has announced that juggle the same, long-serving employees but don’t seem to move the business forward
In the past, it has been forced by regulators to raise capital unexpectedly. Nevertheless, as far as I am concerned, Credit Suisse is stuck in the middle of nowhere and has lost a huge amount of momentum since the tumultuous crisis era, when, ironically, it looked like the smart kid on the block. I have lost count of how many senior management re-organizations chief executive Brady Dougan has announced that juggle the same, long-serving employees but don’t seem to move the business forward.

In mid-October, yet another Credit Suisse investment banking re-jig crossed the wires. Jim Amine and Tim O’Hara have been promoted to lead the division jointly with Gael de Boissard. They will join the executive board. Eric Varvel, who previously co-headed investment banking with de Boissard, changes his role to chairman of the bank’s Asia Pacific and Middle East regions. Amine, (advisory), O’Hara (equities), and de Boissard (fixed income) will each continue to look after their original areas of focus.

In my time as a banker and commentator, I have rarely seen a regime of three chief executives work seamlessly; I don’t expect it will be any different at Credit Suisse.

The question on my mind is how long before the three musketeers dwindle to Romulus and Remus (as it were), or perhaps even Caesar?

In October, Credit Suisse also announced better than expected third-quarter profits of just over SFr1 billion ($1.05 billion). However, it looks as if there might be more headaches in store for the Swiss firm. Dougan said that the bank would seek to cut its leverage exposure by a further SFr70 billion by the end of 2015, although he declined to say how this would be achieved.

Coincidentally, it was earlier reported that the Swiss bank had received a ‘Matters requiring immediate attention’ letter from the Fed about the firm’s leveraged loan portfolio. Credit Suisse is a big player in the global leveraged loan and high-yield bond markets. Reading between the lines, the firm might have to adapt a less aggressive lending policy in certain areas.