Switzerland’s second largest bank announced on Thursday: 9,000 job cuts, investment bank outsourcing, four billion francs of fresh capital, much of it from Saudi Arabia.
“Last Chance for Credit Suisse” is what the NZZ calls the rescue plan. “Credit Suisse becomes a credit sheik,” writes Bleek.
One can lament that in the future, a fifth of the bank will belong to Saudi Arabia and Qatar. It would be better if they were grateful to the sheikhs for the fact that they are ready to toss big money on the fly.
After all, it was not the Saudis who screwed up in CS, but the former head of the bank himself. A Swiss man of particular responsibility is Urs Rohner (62), a long-term chairman of the board of directors who managed the wealth of a large bank until the end of April 2021.
Bilanz editor-in-chief Dirk Schütz (58) did a detailed study of Rohner’s ten-year tenure. He identified three main reasons why this was a decade-long downturn for CS:
- Rohner lacks the expertise that is especially important in international banking.
- Instead, he had “an irrepressible self-confidence that led to self-confidence.”
- His personnel policy served primarily tactical purposes. He chose not the best, but those who were most useful to him.
Well-known business journalist Schutz concludes: “The thesis is bold – with a real banking professional at the helm, CS would never have slipped into such a crisis.”
And now thousands of employees are paying the price of losing their jobs. Investors, including many pension funds, have already lost a lot of money: when Rohner took office, the share price was over 60 francs, now it is hovering at four francs.
However, Rohner himself remains unscathed: during his time on the board of directors of CS, he received a total of 53 million francs – enough to guarantee a carefree life for generations of his descendants. Moreover, only a quarter of his earnings were CS shares, so even a drop in their price did not greatly reduce his fortune.
When discussing bonuses, business leaders always emphasize that millions of dollars in payouts are associated with “long-term success” and are justified by the “high responsibility” of their recipients.
It would be nice!
In many cases, this may even be the case. As long as top managers regularly receive huge bonuses where there is no sign of success and where no one takes responsibility, it should come as no surprise that voters have less and less confidence in the economy and business. Discard friendly offers in the urn!
Then the economy and its associations will be happy to launch confidence building campaigns. It would be more efficient if they ensured that the responsible persons fulfill their duties. For example, Urs Rohner, returning part of his bonuses.