Orbit36 Vice Chairman quoted by NZZ am Sonntag

NZZamSonntag
  • Posted on August 22, 2022 by Dr. Andreas Ita

In yesterday’s edition of NZZ am Sonntag (published by Neue Zürcher Zeitung), award-winning editor Zoé Baches quotes Orbit36 Vice Chairman and Key Client Relationship Manager Claude F. Moser on the strategic options for Credit Suisse’s investment bank.

The article https://magazin.nzz.ch/wirtschaft/der-countdown-fuer-die-investmentbank-der-credit-suisse-laeuft-ld.1698945 (German, behind paywall) let different voices have their say and goes beyond the often used argument that Credit Suisse should shrink-down or sell their currently loss-making investment bank. Claude refers to the common history of UBS and Credit Suisse prior to the financial crisis. Both banks had strong growth ambitions in the US market and were willing to take large risks on their balance sheet in order to gain market share. While UBS incurred large losses and had to cut their investment bank, Credit Suisse went through the crisis unscathed and expanded its business on all fronts. In doing so, their investment bankers partly neglected capital efficiency and were not always sufficiently challenged by the bank’s top.

Claude sees a transformation into a client-centric investment bank as reasonable strategic option for Credit Suisse’s investment bank. He says that a reduction and realignment should be doable in principle. This requires though a meticulous review of every single business segment with respect to profitability in good and in bad times, risk and contribution to the bank’s overall strategy. Particular focus should be given on economic profit, i.e., a business’s profitability after considering the cost of capital which appropriately compensates the shareholders’ for their risk.

In addition, Claude believes that it is important for Credit Suisse to maintain their DNA as bank for entrepreneurs which takes risks for their corporate clients. If Credit Suisse should lose this reputation, the consequences for clients and the bank could be fatal, he warns.

Orbit36 has the competency and experience to support banks in the challenging task of their financial resources optimization, strategic transformation and business planning. Please do not hesitate to reach out to us if you have any questions on the article or if you wish our advice.

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