By Charlie Conchie
The chief of beleaguered lender Credit Suisse has stepped into to soothe staff concerns over the financial stability of the bank, as it prepares to publish a major strategic review this month.
In a memo to staff on Friday, Ulrich Koerner told staff the bank had a “strong capital base and liquidity position” and urged staff to brush off negative news stories after a sharp fall in its share price in recent weeks.
“I know it’s not easy to remain focused amid the many stories you read in the media – in particular, given the many factually inaccurate statements being made,” he said.
“That said, I trust that you are not confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank,” he wrote.
The bank said on Monday it was pressing ahead with a strategic review that includes potential divestitures and asset sales, as it looks to steady the ship following a string of high-profile scandals in the last two years.
The lender is reeling from twin scandals in March last year, when the implosion of U.S. investment firm Archegos Capital led to a $5.5bn hit, and $10bn of supply chain finance funds (SCFF) linked to collapsed British financier Greensill were shuttered.
It has since been hit by losses this year amid a slowdown in its investment banking unit as capital markets activity remains subdued. The Zurich-based bank slumped into the red again for a second consecutive quarter with a net loss of 1.59 billion Swiss francs ($1.6 billion).
Shares in Credit Suisse have tumbled nearly 60 per cent in the past year and have shed nearly 20 per cent of the value in the past month.
Credit Suisse was reportedly sounding out investors for fresh cash last week as it attempts a radical overhaul of its investment bank. The board is reportedly considering splitting the bank into three, with profitable parts of the business sold off to raise cash, the Financial Times first reported.
In the memo to staff on Friday, Koerner said bosses were in the process of “reshaping Credit Suisse for a long-term, sustainable future – with significant potential for value creation.”
“Given the deep franchise we have, with a long-standing focus on serving some of the world’s most successful entrepreneurs, I am confident we have what it takes to succeed,” Koerner wrote in the memo,” he said.
The bank plans to share details of its transformation plans before the 27th of October.
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