Credit Suisse chairman pledges reform after ‘horrible’ year

WASHINGTON -Credit Suisse’s chairman pledged on Friday to reform the bank after a “horrible” 2021 in which it lost billions of dollars. “We had last year a horrible year. We had the biggest loss in the 166 years of the company,” Axel Lehmann said. “We are fully aware that we need to change and we will change, clearly.” Lehmann took over in January at the Swiss bank, which has been hit by a corporate spying scandal, investment fund closures, heavy losses and a string of lawsuits. On Friday, he defended the group, which he said was the focus of much speculation by journalists and others, saying that the bank’s capital base was strong. “This year we are not generating capital because we are not making profit,” he said at an event organised by global banking body, the Institute for International Finance. Lehmann said Credit Suisse had a tier-one capital ratio (CET1) of 13.5 percent half way through the year and a “strong commitment that we will certainly … somewhere be between 13 and 14.” Credit Suisse is scheduled to release details of a much anticipated strategic review alongside third-quarter results on Oct. 27. The bank is trying to recover from a series of scandals, including losing more than $5 billion from the collapse of investment firm Archegos last year, when it also had to suspend client funds linked to defunct financier Greensill Capital. To underpin sustainable profit, Credit Suisse is aiming to streamline its investment bank and expand its wealth management business, which soaks up less capital. Amid the options the bank has said it is considering is finding a buyer for its securitized products business. The more the bank can raise via asset sales, the less it would potentially have to raise from investors. Some analysts say the bank could be left with a capital shortfall of as much as 9 billion Swiss francs. Reuters has also reported that the bank could cut around 5,000 jobs.