Credit Suisse CEO says outflows have decreased ‘very significantly’ as review progresses

Switzerland’s second largest bank, Credit Suisse, is seen here next to a Swiss flag in downtown Geneva.

Fabrice Cofrini | AFP | Getty Images

Swiss credit is seeing a sharp reduction in customer outflows as the struggling Swiss lender moves forward with its major strategic overhaul, new CEO Ulrich Koerner told CNBC on Wednesday.

In November, the bank forecast a fourth-quarter loss of $1.6 billion after announcing a series of measures to address continued underperformance at its investment bank and a series of risk and risk failures. compliance. It also revealed at the time that it had continued to experience large net outflows of assets.

“Outflows, as we said, have come down very significantly, and now we’re seeing money coming back into different parts of the business,” Koerner said on the sidelines of the World Economic Forum in Davos, Switzerland. .

As part of the overhaul, Credit Suisse shareholders in November approved a $4.2 billion capital raise, including a new private equity offering that will see the Saudi National Bank become the largest interest holder. , with a 9.9% stake.

Koerner said the transformation to a “new Credit Suisse” is going well.

“We’ve laid out a very clear plan and we’ve spoken to all the different stakeholder groups over the last three months, as you’d expect,” he said.

“I think the plan, the strategy resonates a lot. We are in full execution, so I think we are making very good progress.”

Credit Suisse also reached out to tens of thousands of clients in Switzerland and around the world for feedback, Koerner said.

“It has generated a very positive momentum, and I think it is a momentum that is with us until 2023,” he added.

‘No worries’ about acquiring a small business

Koerner has confirmed that the announced departure of 10% of Credit Suisse’s investment bankers in Europe is part of his previously announced plans to cut 2,700 jobs by 2023 and reduce the workforce by a total of 9,000 by 2025. .

As part of the overhaul, Credit Suisse will spin off and rebrand its US investment banking division as CS First Boston. The new unit will be led by Michael Klein, a former member of the board of directors of Credit Suisse. Credit Suisse is reportedly about to buy Klein’s investment advisory firm.

Koerner insisted he had “no concerns” about conflicts of interest, stressing that the bank could handle the situation “as professionally as possible”.

“I’m really looking forward to Michael joining me, because Michael is a great banker, he’s a great negotiator and he’s very enterprising, and that’s why I want to go on a journey with him.”

U.S. investor Harris Associates has more than halved its stake in Credit Suisse since June 2022. Koerner said he couldn’t judge the company for its timing, but “we will definitely have discussions.”

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