With the planned spinoff of CS First Boston, Credit Suisse is taking its cue from Wall Street's investment banking boutiques. The business will be even more American.

For the investment banking spinoff, Credit Suisse CEO Ulrich Koerner revived the name of its American-influenced predecessor bank. In undertaking the move in October, Switzerland's second-largest bank is seeking to draw on the rich heritage of the CS First name in advisory and capital markets.

Job Cuts

CS First Boston, which will one day encompass the international capital markets business as well as M&A advisory, will be even closer to Wall Street than Credit Suisse's investment banking unit is today.

Recent reports of job cuts in Europe and Asia, but conspicuously, not in the US suggest this. finews.ch also reported on this (for example, here and here), with cadre in the spotlight. Joachim von der Goltz, a capital markets expert based in Frankfurt, recently turned his back on the institution. Jens Welter, the co-head of the previous Global Banking division, and Daniel McCarthy, head of Global Credit Products, are already gone.

New York, New York

For its part, the career portal «Efinancialcareers» reported further departures at Credit Suisse investment banking London, including Diego Discepoli, the previous European head of trading in interest rate products. The unit, which is considered successful, will be bolted onto CS First Boston; according to the report. Discepoli previously worked on a plan according to which most executives and staff will be based in New York.

As part of the investment bank's restructuring, Credit Suisse stressed that CS First Boston will continue to have a footprint in Europe and Asia. The Swiss capital markets and advisory business will be added to the Swiss Bank division here.

Michael Klein's New Job

It is clear that the spinoff will be positioned primarily where the action is: on Wall Street. This is now true even more as investment bank deals in Europe and Asia have suffered an industry-wide collapse. Even without the reorganization, Credit Suisse would probably have had to react in investment banking, depending on the market trend where the rule is «hire and fire» without remorse. The bank declined to comment when asked by finews.ch.

Michael Klein taking the reins speaks volumes for a further «Americanization» of the spin-off. The American rainmaker with a long Wall Street career has resigned from the Credit Suisse board precisely for this purpose and is likely to become the spinoff's CEO.

According to media reports, Klein plans to contribute his own financial boutique M Klein & Company to CS First Boston, which should massively increase his influence on the company. He can count on executives that already consist heavily of those sympathetic to his cause. Since the days of the historic Credit Suisse First Boston, most the of CS investment banking executives were New York-based.

A Sexy Story

The fact that CS First Boston will be Wall Street-heavy is probably deliberate for another reason. The best way to ensure a sexy story when it comes to finding major investors for the spinoff. Third parties will be able to invest in the company, and an IPO has been rumored.

Saudi National Bank is reportedly interested in investing in CS First Boston in a deal separate from the capital injection for Credit Suisse. An unnamed investor apparently also wants to invest $500 million in the company. According to people familiar with the bank, rumors that the investor is a Swiss institution are wishful thinking.