Credit Suisse
The Credit Suisse Group AG (SIX: CSGN, NYSE: CS) is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.
History
Credit Suisse was founded by Alfred Escher in 1856 under the name Schweizerische Kreditanstalt (SKA, English: Swiss Credit Institution).
In 1942, it opened its first branch outside of Switzerland, in New York City.
In 1988, it gained a controlling stake in The First Boston Corporation and in 1993, Credit Suisse Group bought Schweizerische Volksbank (English: People's Bank of Switzerland). In 1996 the two retail banks were merged and renamed Credit Suisse.
In 2000, it acquired the investment bank Donaldson, Lufkin & Jenrette (DLJ) and, with it, an e-commerce software portfolio, including DLJ Direct, that it later sold to the Bank of Montreal.
In 2009, Credit Suisse was recognized as "Bank of the Year" by the International Financing Review.
In November 2011, CS announced to launch a new Algorithmic Index Platform to support the Quantitative Risk Management(QRM) to provide their clients a tailored solution to gain efficient exposure to a range of systematic equity investment strategies.
Credit Suisse is considered to be within the prestigious "bulge bracket" of investment banks.[2]
The firm earned accolades throughout the recent financial crises for prudent risk management and strategic allocation of capital. It is one of the few major international banks to weather the crisis without any direct government support.
- 1856 – Credit Suisse founded
- 1905 – First branch (in Basel)
- 1940 – First branch outside Switzerland (in New York)
- 1978 – Start of co-operation with The First Boston Corporation
- 1988 – Controlling stake in The First Boston Corporation, which is renamed CS First Boston
- 1989 – CS Holding became parent company of the Group
- 1990 – Acquisition of Bank Leu
- 1993 – Acquisition of Swiss Volksbank
- 1994 – Strategic alliance with Swiss Re
- 1995 – Strategic alliance with Winterthur Group
- 1996 – CS Holding becomes Credit Suisse Group; investment banking business named Credit Suisse First Boston (CSFB)
- 1997 – Merger with Winterthur Group
- 2000 – Acquisition of Donaldson, Lufkin & Jenrette (DLJ)
- 2001 – Sponsorship for the Sauber Petronas Formula One Team
- 2002 – Streamlining of the Group's organizational structure into two business units: Credit Suisse Financial Services and Credit Suisse First Boston
- 2004 – Focusing the Group's organizational structure on three business units:Credit Suisse, Credit Suisse First Boston and Winterthur
- 2006 – Credit Suisse undergoes a rebranding and structural shift to the "One Bank" model. It divests Winterthur to AXA and the newly reorganized Investment Bank replaces the old CSFB. The First Boston affiliation is retired.
- 2008 – Credit Suisse suspends some of its traders in connection with the overvaluation of assets by $2.85 billion. Credit Suisse wrote down $2.85B[3]
Mergers & Acquisitions
CSFB USA is a wholly owned subsidiary of Credit Suisse First Boston Inc., which is, in turn, a wholly owned subsidiary of CS. CS is a wholly owned subsidiary of CSG. CSFB USA was created through the merger with DLJ, which was completed on Nov. 3, 2000. CSFB LLC, CSFB's principal U.S. registered broker-dealer subsidiary, became a subsidiary of DLJ, and DLJ changed its name to CSFB USA.
Prior to the DLJ Merger, the Credit Suisse Group (CS) purchased First Boston in 1988 creating CS First Boston. The firm's bulge bracket status came after the merger with Donaldson, Lufkin & Jenrette (DLJ).[4]
Curtailments
July 2011, Credit Suisse cut 2,000 jobs from their worldwide staff of 50,700 employees in order to maximize cost efficiencies across the bank. This was in response to weaker than expected recovery in the US and Europe that had led them to hire too aggressively in the aftermath of the credit crisis in an effort to take market share from weakened rivals. .[5]
Structure
The bank is organized into three divisions, Investment Banking, Private Banking, and Asset Management. Shared Services, which includes functions such as IT, marketing and legal/compliance, encompasses all three major areas. On January 16, 2006, Credit Suisse First Boston (CSFB), now the Investment Banking division, Credit Suisse Asset Management (CSAM), and Credit Suisse Private Banking (CSPB), re-branded themselves, becoming collectively known as Credit Suisse. This move was initiated to better leverage each others' resources and capabilities to create a "One Bank" brand and effort.
Credit Suisse
The Credit Suisse business unit is a provider of wide-ranging financial services in Europe and other selected markets. It offers investment products, private banking and financial advisory services for private and corporate clients. Credit Suisse was founded by Alfred Escher.
- Private Banking – Credit Suisse is one of the world's largest private banking organizations with branches in Switzerland and numerous international markets. Private Banking specializes in providing personal investment counseling and professional asset management to affluent individuals.
- Corporate & Retail Banking – In Corporate & Retail Banking, Credit Suisse occupies a leading position in the Swiss market. It provides a wide range of banking services for private and corporate clients in Switzerland. In addition, it offers online banking services.
- Financial Institutions – Advice and solutions for banks and financial institutions all around the world.
Credit Suisse, Investment Banking Division
This division used to be known as Credit Suisse First Boston. It is active in investment banking, capital markets and financial services. It is a member of the prestigious bulge bracket of securities firms.
Credit Suisse Private Banking Division
Within the Private Banking sector Credit Suisse provides advice and investment products and services for high net worth individuals globally. Credit Suisse's structured advisory process encompasses both asset and liability management. Furthermore, Credit Suisse is a provider of alternative investment products. Wealth management solutions include tax planning; pension planning; life insurance solutions; wealth and inheritance advice, trusts and foundations. Credit Suisse offers multiple booking platforms and global execution capabilities. In Switzerland, Credit Suisse supplies banking products and services to private banking clients as well as to business and retail clients.
Until 2006 this division was known as Credit Suisse Private Banking or CSPB.
Asset Management
In its asset management business, Credit Suisse offers investments ranging from equities, fixed income and multiple-asset class products, to alternative investments such as real estate, hedge funds, insurance-linked securities, private equity and volatility management. Credit Suisse's asset management business manages portfolios, mutual funds, and other investment vehicles for a broad spectrum of clients ranging from governments, institutions and corporations to private individuals. With offices in 23 countries, Credit Suisse's asset management business is operated as a globally integrated network. Credit Suisse uses the Credit Risk+ method under their financial products arm, to estimate the distribution and expected loss incurred by companies. They also help banks to calculate their capital reserves needed to buffer against credit/default risk.
Shared Services
In Shared Services, Credit Suisse provides services to support the divisions, while improving independent controls. The Shared Services divisions include CFO, COO, CRO, General Counsel, and IT division.
Winterthur was divested from Credit Suisse on June 14, 2006. AXA acquired the leading Swiss insurance company from Credit Suisse Group for about €8 billion.[6]
The CIO of Credit Suisse is Karl Landert, located in Zurich, Switzerland.
Credit Suisse was one of Swiss F1 team Sauber's majority shareholder between 2001 and 2005 and then a sponsor between 2006 and 2009 when the team was known as BMW-Sauber.
Credit Suisse is sponsor of the Switzerland national football team and Roger Federer.
Criticisms
- In an article published by Reuters on February 23, 2008, Brazilian public prosecutor Karen Kahn announced that several employees of Credit Suisse as well as others from UBS, Clariden Leu and AIG were under investigation by federal authorities.[7] In 2007, police arrested 20 people, including bankers at UBS, Credit Suisse unit Clariden and AIG Private Bank after the discovery of illegal activities including money laundering, tax evasion, fraudulent banking and operating without a banking license.[8] During the course of Operation Switzerland in 2008, Christian Peter Weiss and 13 other employees of Credit Suisse were arrested in Rio de Janeiro for helping operate an illegal money transfer scheme.
- The New York Times reported on December 16, 2009, that Manhattan District Attorney Robert Morganthau, the Justice Department and Federal Reserve had reached an agreement with Credit Suisse in which Credit Suisse was fined $536 million. Credit Suisse settled on charges that it violated sanctions regulating financial transactions with Iran. The charges included "stripping", the practice of removing the identity and origin of funds used in transactions. Credit Suisse employees stripped the identities of Iranian banks enabling funds to be transferred to the Atomic Energy Organization of Iran and the Aerospace Industries Organization, entities respectively involved in the production of nuclear weapons and long range missiles. Credit Suisse advised Iranian banks such as Bank Melli and Bank Saderat on methods to hide their identities and send more than a billion dollars through New York banks.
- In 2009 a federal bankruptcy judge in Montana accused Credit Suisse of "naked greed" so overreaching as to "shock the conscious of the court." The judge was referring to an alleged "loan to own" scheme between Credit Suisse and Yellowstone Club founder Tim Blixseth in which Credit Suisse lent the private ski and golf club $375 million, $210 million of which Blixseth took as a personal payment. This payment sparked a lawsuit by club investor Greg LeMond, charges of tax evasion by state governments [9] and eventually led to the Club's bankruptcy.[10] The Yellowstone Club - Blixseth court findings opened the doors to other suits targeting Credit Suisse with predatory lending practices. Credit Suisse faces a class action lawsuit on behalf of more than 3,000 investors seeking $24 billion in claims for similar real estate deals in Idaho, Nevada, Montana and the Bahamas.[11]
- In 2011 Credit Suisse, facing a U.S. Department of Justice probe, reportedly agreed to settle claims they aided clients evade U.S. taxes through secret accounts and other dealings to avoid a formal federal indictment. The agreement reports to include paying more than US$1 billion in fines and releasing details on U.S. account holders and related deals where the bank may have aided clients in evading U.S. taxes.[12]
Lloyds Banking Group, Barclays, and several other banks were involved with similar information stripping scandals around the same time as Credit Suisse.[13]
See also
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Main competitors
References
- ^ a b c d e "Annual Results 2010" (PDF). Credit Suisse. https://www.credit-suisse.com/investors/doc/csg_financialreport_4q10.pdf. Retrieved 10 February 2011.
- ^ http://www.ibankingfaq.com/category/about-investment-banking/
- ^ Financial stocks decline following Credit Suisse $2.85B write-down Forbes.com
- ^ [1]
- ^ Credit Suisse to axe 2,000 jobs
- ^ Credit Suisse Group sells Winterthur to AXA
- ^ Des banques Suisses contournent nos règles Brésiliennes from LeTemps.ch (French)
- ^ UBS and Credit Suisse bankers arrested in Brazil tax probe from Reuters April 23, 2008
- ^ Tim Blixseth facing forced bankruptcy over taxes, from Bloomberg News, April 6, 2011.
- ^ Citing “Naked Greed,” Judge Eviscerates Credit Suisse in Yellowstone Club Case from New West May 12, 2009
- ^ Lake Las Vegas investors' lawsuit gets judge's approval to proceed from Las Vegas Business Review March 7, 2011.
- ^ Credit Suisse likely to settle U.S. probe than risk charges, Bloomberg News, August 14, 2011.
- ^ "Probe Circles Globe to Find Dirty Money, Carrick Mollenkamp, Wall Street Journal, 2010 9 3
- ^ "WORLD'S MOST ADMIRED COMPANIES". CNN. CNN. http://money.cnn.com/magazines/fortune/mostadmired/2011/industries/35.html. Retrieved 2011-08-25.
External links
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