Horta-Osorio, who joined Credit Suisse from Lloyds in April, has revealed sweeping plans to restructure the beleaguered lender and dramatically pare back its investment bank activities after it suffered multibillion losses this year.
Under the new strategy announced today, Credit Suisse will rein in its investment bank and focus on its wealth management division, in an effort to pull back from the prime broking unit that serves hedge funds and slid into a $5.4bn loss from the collapse of US family office Archegos Capital in March.
It comes after Osario has spent the last few months planning the much-anticipated structural review, after the bank was embroiled in a series of high-profile scandals.
Following the strategy announcement, CFO David Mathers told reporters on Thursday that the move was a “straightforward reallocation from an economic loss-maker to an economic profit-maker.”
The bank said it would de-risk its prime broking unit following from the Archegos collapse, which Mathers said had led to revenue loss of around $300m.
The new strategy has been designed to “rebuild a culture of trust” in and around the bank, Osario told reporters on Thursday, as he acknowledged that there was “no quick fix” and it would be a “continuous effort.”
“Risk will be a key area of continued focus going forward,” he said, adding that the bank now has a “clear and robust long-term vision” as part of a three-year plan going forward.
Pressed on what the restructuring would mean in terms of headcount, CFO David Mathers said
Alongside the strategy review, the bank posted its third quarter results, which showed profit fell 21 per cent year-on-year, which it said was due to an “elevated effective tax rate”.
Pre-tax, however, profits rose 26 per cent year-on-year, driven by strong performance from its wealth management business, where revenues were up 3 per cent from a year earlier.
Looking ahead the picture was still fairly bleak, as it expects a loss in the final quarter while it writes off some $1.8bn of goodwill related to the investment bank.