By John O’Donnell and Michael Shields
FRANKFURT/ZURICH (Reuters) -Credit Suisse will pare back its investment bank and focus on building its wealthy client base, the Swiss bank said on Thursday, as it regroups following a string of scandals.
The bank will shutter much of its prime broking business that dealt with hedge funds such as failed investment outfit Archegos, sharpening its focus by hiring for its private bank for the wealthy, which will be centralised into one global business.
The bank said it would focus on risk management and foster a culture of accountability, as it reported a 21% fall in third quarter profit.
Thursday’s announcement is the first step on a road to reining in the bank, being charted by Credit Suisse’s chairman, Antonio Horta-Osorio, who took over in April as the bank grappled with the fallout of reckless dealmaking.
Over the past year, Credit Suisse has been fined for arranging a fraudulent loan to Mozambique, tarnished by its involvement with defunct financier Greensill, racked up $5.5 billion in losses when Archegos collapsed, and been rebuked by regulators for spying on executives.
That cast a cloud over the bank, prompted an exodus of key staff and fuelling speculation the group, whose stock price has languished, could even be bought by a rival.
($1 = 0.9124 Swiss francs)
(Writing by John O’Donnell; Editing by Michael Shields)
