The second Swiss bank and one of the largest banks in the world is in serious trouble and is currently fighting for its survival. A negative result is likely to trigger a shock similar to the one caused by the bankruptcy of US bank Lehman Brothers in September 2008. This event triggered one of the worst financial and economic crises since the Great Depression.
A year ago, Credit Suisse had a market cap of $22.3 billion. Today, the market value is only $10.4 billion. Shares of Credit Suisse fell 56.2 percent in one year to $3.98, The Street reported.
It’s a real nightmare for the bank that managed to get through the financial crisis without losing too many springs. At the time of this crisis, Credit Suisse stocks had certainly fallen, but they had only fallen to the $45 level, which seemed like an achievement for a bank at the time.
Employee morale has been gloomy in recent days. The bank has not yet extended the contracts of certain contractors. Rooms are no longer really being replaced, TheStreet has learned.
The talent leaves. The bank has just lost one of its senior dealmakers, Jens Welter, who joined Citigroup after 27 years. Welter was global co-head of banking when he left. Another starting point is Daniel McCarthy, head of global credit products.
“I am aware that there is a lot of uncertainty and speculation, both inside and outside the company,” Chief Executive Officer Ulrich Korner said in a memo to employees on Sept. 30. “While you will understand that I cannot share details about our transformation plans. Before October 27, I also want to make sure that you hear from me directly during this challenging period. I will therefore be sending you regular updates until then.”
In this memo seen by TheStreet, the CEO explained that “this is a critical moment” for the bank and warned employees that the rumors and speculation will continue and get louder.
He assured them that the stock price does not reflect the financial health of the company.
“I trust you will not confuse our daily share price performance with the bank’s strong capital base and liquidity position,” he said.
“We are in the process of reshaping Credit Suisse for a long-term sustainable future – with significant potential for value creation,” Korner added. “I am convinced that we have what it takes to succeed.”
The investment bank’s mistakes have plunged Credit Suisse into countless successive scandals in recent years, reviving speculation about its bankruptcy or merger with its rival UBS, The Street reported.
ALSO SEE:
Infosys leads IT industry Q2 show with 4% revenue growth, says Jefferies
Suzlon Energy’s Founder Chairman Tulsi Tanti Dies of Cardiac Arrest