Credit Suisse weighs splitting asset management, wealth units

Credit Suisse Group is considering splitting its asset management unit from the wealth management division, as Chief Executive Thomas Gottstein grapples with the aftermath of the Greensill scandal across the bank’s businesses.

Gottstein, speaking at a Morgan Stanley conference Tuesday, said that having asset management as a subdivision of the much larger business catering to wealth and high-net-worth individuals is “something that I always had some doubts about,” he said. “It’s something we are looking at, together with the board.”

Even before the Greensill implosion, the asset management unit had been under review after the bank shuttered funds last year and laid off staff as it struggled to perform amid the pandemic-induced market volatility. The business has now plunged Gottstein into the biggest crisis of his tenure due to its links with the failed empire of Lex Greensill.

The Swiss bank was forced to suspend and then liquidate $10 billion of funds it ran with Greensill after doubts on asset valuations. That set off a cascade of events that ultimately led to Greensill’s bankruptcy.

MANAGEMENT QUESTIONS

The aftermath of the crisis -- Credit Suisse warned earlier Tuesday that it may need to take future charges -- has raised questions about the bank’s risk management and its strategy of focusing on multiple lines of business with wealthy clients and cross-selling.

Credit Suisse on Tuesday pushed back against Greensill’s contention that he had warned top Credit Suisse officials of his difficulties in securing fresh insurance to cover loans “weeks” before his collapse. The bank said Lara Warner, its chief risk and compliance officer, had only received notice that insurance would expire “exactly one week” before the bank announced it was gating its funds that invested in Greensill on March 1.

The bank’s overall performance last year was also hampered by a $450 million impairment on Credit Suisse’s stake in the wound-down York Capital Management, a strategy that had been intended to give clients access to alternative investments.

The string of missteps has turned the unit, traditionally a stable business, into a major headache for Gottstein, who took over as CEO from Tidjane Thiam in February 2020.

Gottstein said Tuesday that the bank wants to be “less reliant” on asset management partnerships.