Credit Suisse is splitting away its asset-management unit from its business with wealthy clients. It is poaching the former head of rival UBS' money-management arm to run it.
Zurich-based Credit Suisse will cleave its asset management from international wealth management, from April 1, it said in a statement on Thursday. The move follows the implosion of a line of supply chain funds operated with insolvent finance boutique Greensill.
Credit Suisse said the move underscores «the strategic importance of the asset management business for the bank and its clients» for the division, which swung to a 39 million Swiss franc loss ($42 million) before taxes last year after kissing of a hedge fund stakeholding. It is hiring Ulrich Koerner, a 58-year-old banker who ran UBS' asset management until last year, to run it.
Showcasing Greensill
The unit's current global head, Eric Varvel, will work with Koerner in the coming months, then focus on his other jobs as CEO of the Swiss bank's U.S. activities as well as overseeing its wider investment bank. Varvel showcased the Greensill funds as recently as December, which by that time had bulged to more than $10 billion, as a cornerstone of its fixed income efforts.
The threat to Credit Suisse from Greensill is «material to its operating results,» it said in its annual report, also released on Thursday. But more so, «Credit Suisse might also suffer reputational harm associated with these matters that might cause client departures or loss of assets under management,» it said.
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