Saudi Press

Saudi Arabia and the world
Wednesday, Nov 12, 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.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Cristiano Ronaldo Embraces Saudi Arabia’s 2034 World Cup Vision with Key Role
Saudi Arabia’s Execution Campaign Escalates as Crown Prince Readies U.S. Visit
Trump Unveils Middle East Reset: Syria Re-engaged, Saudi Ties Amplified
Saudi Arabia to Build Future Cities Designed with Tourists in Mind, Says Tourism Minister
Saudi Arabia Advances Regulated Stablecoin Plans with Global Crypto Exchange Support
Saudi Arabia Maintains Palestinian State Condition Ahead of Possible Israel Ties
Chinese Steel Exports Surge 41% to Saudi Arabia as Mills Pivot Amid Global Trade Curbs
Saudi Arabia’s Biban Forum 2025 Secures Over US$10 Billion in Deals Amid Global SME Drive
Saudi Arabia Sets Pre-Conditions for Israel Normalisation Ahead of Trump Visit
MrBeast’s ‘Beast Land’ Arrives in Riyadh as Part of Riyadh Season 2025
Cristiano Ronaldo Asserts Saudi Pro League Outperforms Ligue 1 Amid Scoring Feats
AI Researchers Claim Human-Level General Intelligence Is Already Here
Saudi Arabia Pauses Major Stretch of ‘The Line’ Megacity Amid Budget Re-Prioritisation
Saudi Arabia Launches Instant e-Visa Platform for Over 60 Countries
Dick Cheney, Former U.S. Vice President, Dies at 84
Saudi Crown Prince to Visit Trump at White House on November Eighteenth
Trump Predicts Saudi Arabia Will Normalise with Israel Ahead of 18 November Riyadh Visit
Entrepreneurial Momentum in Saudi Arabia Shines at Riyadh Forward 2025 Summit
Saudi Arabia to Host First-Ever International WrestleMania in 2027
Saudi Arabia to Host New ATP Masters Tournament from 2028
Trump Doubts Saudi Demand for Palestinian State Before Israel Normalisation
Viral ‘Sky Stadium’ for Saudi Arabia’s 2034 World Cup Debunked as AI-Generated
Deal Between Saudi Arabia and Israel ‘Virtually Impossible’ This Year, Kingdom Insider Says
Saudi Crown Prince to Visit Washington While Israel Recognition Remains Off-Table
Saudi Arabia Poised to Channel Billions into Syria’s Reconstruction as U.S. Sanctions Linger
Smotrich’s ‘Camels’ Remark Tests Saudi–Israel Normalisation Efforts
Saudi Arabia and Qatar Gain Structural Edge in Asian World Cup Qualification
Israeli Energy Minister Delays $35 Billion Gas Export Agreement with Egypt
Fincantieri and Saudi Arabia Agree to Build Advanced Maritime Ecosystem in Kingdom
Saudi Arabia’s HUMAIN Accelerates AI Ambitions Through Major Partnerships and Infrastructure Push
IOC and Saudi Arabia End Ambitious 12-Year Esports Games Partnership
CSL Seqirus Signs Saudi Arabia Pact to Provide Cell-Based Flu Vaccines and Build Local Production
Qualcomm and Saudi Arabia’s HUMAIN Team Up to Deploy 200 MW AI Infrastructure
Saudi Arabia’s Economy Expands Five Percent in Third Quarter Amid Oil Output Surge
China’s Vice President Han Zheng Meets Saudi Crown Prince as Trade Concerns Loom
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
US and Qatar Warn EU of Trade and Energy Risks from Tough Climate Regulation
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
China’s lesson for the US: it takes more than chips to win the AI race
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
Wave of Complaints Against Apple Over iPhone 17 Pro’s Scratch Sensitivity
Syria Holds First Elections Since Fall of Assad
×