Business & Investment

Credit Suisse Chairman Alter Osorio said large investors will regain Reuters overhaul

© Reuters. File Photo: Lloyds Banking Group CEO Antonio Horta Osorio arrives at a garden party at Buckingham Palace in London on May 22, 2018.Reuters / Simon Dawson / File Photos

Zurich (Reuters)- Credit suisse Major shareholders of (SIX :) support the new strategy of banks hit by scandals, Chairman Antonio Orta Osorio told the Swiss newspaper NZZ am Sonntag, and the group also has an executive payment system to reduce risk. He added that he would review it.

“We are in close contact with our shareholders, especially the six largest companies that own about 30% of our capital,” Horta-Osorio told the paper in an article published Sunday.

“We understand their priorities and I think they fully support our strategy.”

Credit Suisse announced a restructuring on Thursday, saying it would curb investment bankers and invest in wealth management as it seeks to curb the multi-billion dollar bohemian culture of a series of scandals.

Alter Osorio, who joined from LON: Bank in April, said risk management and responsibility are at the heart of Switzerland’s second-largest creditor operations.

However, the overhaul was slow to respond from investors, with Credit Suisse’s share price declining by more than 5% after the announcement, and analysts said there was general disappointment that the change was not bold enough. ..

Credit Suisse CEO Thomas Gottstein said in an interview released Sunday that he considered the change “substantial.”

“After all, we are shifting our capital of CHF 3 billion ($ 3.29 billion) from investment banking to wealth management, an increase of about 25%, and by 2024 we have 500 new clients. Our goal is to hire an advisor.

“We’ve considered a number of measures over the past few months and have come to the conclusion that we can achieve the highest returns with this strategy in the medium term, especially with regard to the risks we are significantly reducing,” Gottstein said. I am. ..

Executives refused media coverage of the differences between them. “The fact is that we agreed with all the important questions,” Gottstein said.

Credit Suisse is also adapting its compensation model to mitigate risk, Alter Osorio said, and plans to release details in the first half of 2022.

According to a review released in July, the “lazy” attitude and “lack of accountability” to risk was due to the bank’s $ 5.5 billion loss to investment fund Archegos.

“We will structure variable compensation so that there is no incentive to take excessive risks,” the chairman told NZZam Sonntag.

“We are more closely tied to the risk of being paid and the financial benefits, which means that if the business is capital intensive and results in profits, managers will not be rewarded with higher bonuses. increase.”

($ 1 = 0.9120 Swiss francs)

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Credit Suisse Chairman Alter Osorio said large investors will regain Reuters overhaul Credit Suisse Chairman Alter Osorio said large investors will regain Reuters overhaul

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