The year is 1856, modern Switzerland is not yet ten years old: Alfred Escher (1819–1882) founded the Schweizerische Kreditanstalt with like-minded people to raise sufficient capital for railway construction independently of other countries. In 1997 Kreditanstalt became Credit Suisse (CS), a major international bank advertising billions of assets worldwide on behalf of Switzerland.
CS has been successful for a long time, even with a new name. But in the last 15 years, senior management has made fatal mistakes in the strategic direction of the bank, as well as countless scandals such as overpayments, shadowing and billions in fines. Meanwhile, confidence in CS has been shaken and the stock is no longer worth even five Swiss Francs. This is why the current management team had to urgently seek solutions over the past few weeks to stop the bearish trend.
This week, CS Boss Ulrich Körner (60) and Chairman of the Board Axel Lehmann (63), both of whom have only been in the job for a few months, presented their concepts for the future (see box). But they did so not at the Paradeplatz in Zurich, but in a deserted hall far from London. The choice of location is indicative of the development of CS: There are fewer and fewer Swiss in the bank with the word “Switzerland” on it.
A glance at the annual reports shows that the number of jobs in Switzerland is declining. In 2001, CS had approximately 28,600 full-time jobs in Switzerland. Today, only 16,000 of the 50,000 jobs are located in the bank’s home country. An additional 2,000 jobs will be lost in Switzerland as part of the latest restructuring, which Körner and Lehmann announced this week. For the foreseeable future, Credit Suisse will employ only half of what it did at the beginning of the millennium in this country.
Swissness raises questions
Given this decline, Michael von Felten, 62, President of the Swiss Bank Staff Association, raises the question of how much Switzerland should be in a bank that calls itself Credit Suisse. “Large banks around the world still enjoy the Swissness label, which stands for security and trust. As a result, they also have a special responsibility for employees and jobs in Switzerland.”
The rate of contraction in Switzerland is particularly bitter as investment bankers in the US are responsible for the current crisis. “Swiss employees are working extremely well and therefore lay the foundation for healthy business development at CS,” says Andreas Venditti (50), financial analyst at Bank Vontobel.
In light of this, Venditti overlooked the fact that the Swiss business was not emphasized further in Körner and Lehmann’s presentation. “It annoys the staff”
Vincent Kaufmann, 42, managing director of the Ethos shareholder foundation, agrees. For him, loyalty to Switzerland does not go far enough. «CS management emphasizes the bank’s Swiss roots. What this means concretely for employees remains unclear. » Kaufmann says Swiss trade needs to be “push” much more.
In this context, it is noteworthy that CS is largely in foreign hands. According to the 2021 Annual Report, only 20 percent of institutional investors come from Switzerland, and Switzerland is losing even more weight with the involvement of the Saudi National Bank, which senior management introduced this week as a new major investor.
Are shareholders guilty?
Could this combination of shareholders be one of the reasons why CS in Switzerland has cut an above-average number of business over the past two decades? Or to put it another way: If investors had more ties to the company’s country of origin, would CS perhaps leave more business in Switzerland?
CS itself strongly denies this. “There is no such effect,” says a spokesperson. On the contrary, the bank prides itself on its “broad and international shareholder base” that reflects the company’s global reach and is important for the bank to achieve sustainable growth.
CS explains the downsizing over the past two decades, saying that over the years the bank has adapted to market developments and changing customer needs. “We have also continually reinvented and partially globalized our business model – and in line with our business strategy,” a spokesperson said. However, CS is completely dependent on its domestic market. “The Bank of Switzerland is one of the heart of the new bank.”
Michael von Felten of the bank staff association is keeping CS’ word and demanding that those responsible now act accordingly.