The new chief executive officer of Credit Suisse Group has asked investors for fewer than 100 days to deliver a turnaround strategy, amid a market turmoil that saw the lender’s shares drop to a record low.
Ulrich Koerner is finalising a new strategic plan to be released on October 27, he said in an internal memo on Friday.
He was appointed in July, and has since been navigating market speculation, banker exits, and capital doubts for the troubled Swiss lender.
The new strategic plan could lead to sweeping changes to its investment bank and may include cutting thousands of jobs over a number of years, according to a Bloomberg report.
On Sunday, shares of Credit Suisse dropped nearly 10 percent, after a Financial Times report that its executives are in talks with major investors to reassure them amid the crisis.
The cost of insuring the company’s bonds against default climbed about 15 per cent last week to levels not reported since 2009.
The five-year credit default swaps price of about 250 basis points is up from about 55 bps at the start of the year and is near the highest on record.
While these levels are still far from distressed and are part of a broad market sell-off, they signify deteriorating perceptions of creditworthiness for the bank in the current environment.
Credit Suisse’s market capitalisation dropped to about 10 billion Swiss francs, meaning any share sale would be highly dilutive to longtime holders. The market value was above 30 billion francs as recently as March 2021.
(With Bloomberg)
Follow us on
