How CSFB's chief executive aims to stick to plan
INVESTORS REACTED WELL to plans announced last month by Credit Suisse Group CEO Oswald Grübel to restructure the group, and in particular its investment banking arm, Credit Suisse First Boston. Shares rose almost 5% in the course of the day of the announcement, December 7.
Beforehand, those employees with a dark sense of humour and a basic grasp of history had already dubbed the day Pearl Harbor Day, referring to the Japanese attack on the US naval base on the same date in 1941.
They were expecting Brady Dougan, CEO of CSFB, to announce a shift in strategy away from trying to be one of the bulge-bracket investment banks, and as a consequence also announce large-scale job losses. In the event, neither of these approaches was announced.
After the palace coup that ousted his predecessor, John Mack, in June, Dougan had initiated a six-month strategic review of CSFB's businesses. It was, he tells Euromoney, "the most thorough [review] process I've experienced". Nevertheless, it turned out to be a damp squib.
So perhaps investors' favourable reaction sprang from the news that Credit Suisse will seek to spin off Winterthur, the insurance division it bought in 1997, which has brought the Swiss bank little more than pain since.