While Credit Suisse has apparently succeeded in stopping the outflow of client funds, the bloodletting of highly qualified staff continues unabated. It could ultimately be the bank's undoing.
Everything may look good on paper, but Credit Suisse's disastrous 2022 annual results are now on the books, and the bank's reorganization is seemingly proceeding faster than planned. That is the message from CEO Ulrich Koerner. But the latest news leaves an ambivalent impression in more ways than one.
It is finally out how much client money left Credit Suisse lost last year, namely over 120 billion Swiss francs. That's an enormous amount for a bank that for decades built its reputation as a haven of security and stability. It's clear from the results the bank's customers no longer buy into that perception which is why they have withdrawn all or parts of their assets.
Hard to Earn, Easily Lost
The money will not return as quickly as it left, even if Credit Suisse uses a few tricks and incentives to woo its customers. History is replete with examples of wealth and business built over decades or generations evaporating overnight.
Even Credit Suisse's best strategy could fail here. Trust is not only at stake with customers, but also with employees where there the loss is far from over. Hardly a day goes by without employees leaving for the competition. And it isn't merely rank-and-file workers, but managers who have been with the bank for decades in some cases.
Dramatic Departures
When such core employees turn their backs on their long-time employer, things are no longer on track. It is a worrying trend cutting across all divisions. Not only in Switzerland but also in American investment banking and Asian wealth management. The pace of departures has taken on dramatic proportions with seemingly no end in sight.
Precisely to find lost treasure and new money, better treasure hunters are needed. Those who are lacking now will likely continue to do so for a while since in its current state Credit Suisse can hardly be a desirable address, putting the bank in a vicious cycle.
Bonus Waivers
A turnaround in the undesirable situation could be ushered in during the upcoming bonus period. If the top management of Credit Suisse seizes the opportunity of the century to completely forego bonuses, it would send an overdue signal and reward the lower echelons for their perseverance and loyalty in recent years.
At the same time, it provides them with an incentive to acquire new client funds.
