London Daily

Focus on the big picture.
Sunday, Nov 23, 2025

Credit Suisse has stumbled from one crisis to another - but the panic is possibly overdone

Credit Suisse has stumbled from one crisis to another - but the panic is possibly overdone

Senior executives at the bank appear to have spent most of the weekend trying to reassure clients and investors of its financial health, according to a report.

It never rains but only pours at Credit Suisse.

Switzerland's second largest lender has stumbled from one crisis to another in recent years.

There was the corporate spying scandal three years ago in which the bank was accused of hiring a private detective after one of its former executives had defected to a rival.

Shortly afterwards, the bank lost $5.5bn from its exposure to the collapsed hedge fund manager Archegos Capital, while it also suffered losses related to the collapse of the supply chain finance group Greensill Capital.

Other embarrassments included a string of fines for making fraudulent loans - nicknamed 'tuna bonds' - to the government of Mozambique between 2012 and 2016.

After these various setbacks Credit Suisse appeared to have pulled off a considerable coup when, in April 2021, it hired Antonio Horta-Osorio, the highly regarded former chief executive of Lloyds Banking Group, to become its new chairman. Investors were delighted when he promised to rebuild the bank's reputation.

Unfortunately, in January this year, he was forced to resign after an internal investigation revealed he had broken COVID quarantine rules to attend the Wimbledon tennis championships and had also used the bank's private jet to take a holiday to the Maldives.

He was followed out of the door in July this year by Thomas Gottstein, the chief executive, who resigned for what he described as "personal and health-related considerations".

His successor Ulrich Korner, the bank's fourth chief executive in just 17 years, has promised a major restructuring announcement before the end of the month in an attempt to cut costs and stem the flow of red ink that has characterised recent results.

The bank has reported a loss in five of the last seven quarters and in each of the last three due, chiefly, to issues in its investment banking division.

Ulrich Korner, the bank's fourth chief executive in just 17 years


Mr Korner, nicknamed 'Uli the Knife' for his cost-cutting prowess, ought to have represented a clean break with the past.

Unfortunately, according to the Financial Times, he appears to have spent most of the weekend - along with other senior executives at the bank - trying to reassure clients and investors about the bank's financial health.

Mr Korner sent an internal memo to colleagues on Friday afternoon, which promptly leaked, in which he urged them to "remain focused amid the many stories you read in the media" and told them not to confuse the bank's weak share price performance - the shares are down 61.5% so far this year following a 5% decline this morning - with its "strong capital base and liquidity position".

That does not appear to have calmed nerves over the bank's financial health.

Apart from the latest lurch in Credit Suisse's share price to a new all-time low - the bank is now valued at less than its book value - there has been a spike in credit default swaps (the instruments investors use to insure themselves against a potential default) of Credit Suisse. Rumours abound that the bank is also preparing to tap investors for capital.

Is the panic being overdone? Possibly. Credit Suisse has a reasonably strong capital position and certainly one that bears no comparison with those of the lenders that collapsed or required rescuing during global financial crisis.

It is why various market commentators have been at pains today to stress that this does not appear to be a so-called 'Lehman moment'.

But it is a fact that Credit Suisse's funding costs have risen, gnawing away at its profitability, following downgrades in its credit rating.

The irony is that Mr Gottstein and his predecessor at Credit Suisse, the much-respected former Prudential chief executive Tidjane Thiam, had done much work to try and reshape Credit Suisse following the financial crisis.

A conscious decision was taken, with the backing of the Swiss government, to reduce the size of the lender's investment banking division and to focus on wealth management.

But the scandals have kept on coming. Shortly before Mr Gottstein resigned, the bank became the first Swiss domestic lender to be fined for a corporate crime, its punishment relating to its failure to stop money laundering by Bulgarian drug dealers between 2004 and 2008.

The woes of this bank matter. Credit Suisse, whose ambassadors include the tennis superstar Roger Federer, is one of just 30 lenders on the list of 'Global Systemically Important Banks' published by the Financial Stability Board (the multinational body that promotes global financial stability) which means, in the terminology adopted around the time of the financial crisis, that it is too big to fail.

It is also a huge employer in the UK. Of the bank's 45,000 employees globally some 6,000 are here, the majority working at its offices at Canary Wharf, which are also home to an art collection that reflects the bank's lavish patronage of the sector.

It seems highly likely that if the restructuring planned by Mr Korner is as radical as is being rumoured - and as radical as those shareholders who may be tapped for cash are demanding - then the bank may be employing somewhat fewer people in both London and New York in the near future.

Comments

Oh ya 3 year ago
Remember folks you never show the sheep a vodeo of a sheep slaughter house before you load them up and take them in. You show them nice green pastures with a beautiful creek. Be calm they say as the big knife slits the throat

Newsletter

Related Articles

0:00
0:00
Close
Johnson Blasts ‘Incoherent’ Covid Inquiry Findings Amid Report’s Harsh Critique of His Government
Lord Rothermere Secures £500 Million Deal to Acquire Telegraph Titles
Maduro Tightens Security Measures as U.S. Strike Threat Intensifies
U.S. Envoys Deliver Ultimatum to Ukraine: Sign Peace Deal by Thursday or Risk Losing American Support
Zelenskyy Signals Progress Toward Ending the War: ‘One of the Hardest Moments in History’ (end of his business model?)
U.S. Issues Alert Declaring Venezuelan Airspace a Hazard Due to Escalating Security Conditions
The U.S. State Department Announces That Mass Migration Constitutes an Existential Threat to Western Civilization and Undermines the Stability of Key American Allies
Students Challenge AI-Driven Teaching at University of Staffordshire
Pikeville Medical Center Partners with UK’s Golisano Children’s Network to Expand Pediatric Care
Germany, France and UK Confirm Full Support for Ukraine in US-Backed Security Plan
UK Low-Traffic Neighbourhoods Face Rising Backlash as Pandemic Schemes Unravel
UK Records Coldest Night of Autumn as Sub-Zero Conditions Sweep the Country
UK at Risk of Losing International Doctors as Workforce Exodus Grows, Regulator Warns
ASU Launches ASU London, Extending Its Innovation Brand to the UK Education Market
UK Prime Minister Keir Starmer to Visit China in January as Diplomatic Reset Accelerates
Google Launches Voluntary Buyouts for UK Staff Amid AI-Driven Company Realignment
UK braces for freezing snap as snow and ice warnings escalate
Majority of UK Novelists Fear AI Could Displace Their Work, Cambridge Study Finds
UK's Carrier Strike Group Achieves Full Operational Capability During NATO Drill in Mediterranean
Trump and Mamdani to Meet at the White House: “The Communist Asked”
Nvidia Again Beats Forecasts, Shares Jump in After-Hours Trading
Wintry Conditions Persist Along UK Coasts After Up to Seven Centimetres of Snow
UK Inflation Eases to 3.6 % in October, Opening Door for Rate Cut
UK Accelerates Munitions Factory Build-Out to Reinforce Warfighting Readiness
UK Consumer Optimism Plunges Ahead of November Budget
A Decade of Innovation Stagnation at Apple: The Cook Era Critique
Caribbean Reparations Commission Seeks ‘Mutually Beneficial’ Justice from UK
EU Insists UK Must Contribute Financially for Access to Electricity Market and Broader Ties
UK to Outlaw Live-Event Ticket Resales Above Face Value
President Donald Trump Hosts Saudi Crown Prince Mohammed bin Salman at White House to Seal Major Defence and Investment Deals
German Entertainment Icons Alice and Ellen Kessler Die Together at Age 89
UK Unveils Sweeping Asylum Reforms with 20-Year Settlement Wait and Conditional Status
UK Orders Twitter Hacker to Repay £4.1 Million Following 2020 High-Profile Breach
Popeyes UK Eyes Century Mark as Fried-Chicken Chain Accelerates Roll-out
Two-thirds of UK nurses report working while unwell amid staffing crisis
Britain to Reform Human-Rights Laws in Sweeping Asylum Policy Overhaul
Nearly Half of Job Losses Under Labour Government Affect UK Youth
UK Chancellor Reeves Eyes High-Value Home Levy in Budget to Raise Tens of Billions
UK Urges Poland to Choose Swedish Submarines in Multi-Billion € Defence Bid
US Border Czar Tom Homan Declares UK No Longer a ‘Friend’ Amid Intelligence Rift
UK Announces Reversal of Income Tax Hike Plans Ahead of Budget
Starmer Faces Mounting Turmoil as Leaked Briefings Ignite Leadership Plot Rumours
UK Commentator Sami Hamdi Returns Home After US Visa Revocation and Detention
UK Eyes Denmark-Style Asylum Rules in Major Migration Shift
UK Signals Intelligence Freeze Amid US Maritime Drug-Strike Campaign
TikTok Awards UK & Ireland 2025 Celebrates Top Creators Including Max Klymenko as Creator of the Year
UK Growth Nearly Stalls at 0.1% in Q3 as Cyberattack Halts Car Production
Apple Denied Permission to Appeal UK App Store Ruling, Faces Over £1bn Liability
UK Chooses Wylfa for First Small Modular Reactors, Drawing Sharp U.S. Objection
Starmer Faces Growing Labour Backlash as Briefing Sparks Authority Crisis
×