If you're employed at Credit Suisse, it might be supposed that your fuse is a bit shorter than it used to be and that Archegos and Greensill are your main trigger words. If you're a trader at Credit Suisse, you might want to add 'Antonio Horta-Osorio' to the list.
Antonio arrived at Credit Suisse in May. He was saying awkward things even before he landed, including - at the bank's Annual General Meeting - that there would be an “in-depth assessment of the bank’s strategic options,” and that he would review whether the bank has the “right incentives . . . including on remuneration."
While this review could go either way (and it's gone pretty well for the senior people receiving Credit Suisse retention bonuses), it might not work out so well for Credit Suisse's salespeople and traders. There are persistent rumors that Horta-Osorio has it mind to make big cuts to Credit Suisse's sales and trading business because he's unhappy with the risks associated with the global markets division, as illustrated by the Archegos losses.
These rumors have been propagated most zealously by Swiss banking gossip site Inside Paradeplatz, which today reiterates that "big trading is about to end" and that CEO Thomas Gottstein, an alleged cheerleader for the trading division, is being supplanted by Horta-Osorio who will effectively be running the bank himself through a cabal of directors.
It's not clear how valid Inside Paradeplatz' assertions are, and it's important to note that Credit Suisse has denied them. However, Horta-Osorio doesn't exactly seem to be going out of his way to offer any reassurances either. Bloomberg reports that in a recent meeting with Credit Suisse's top bankers, the new chairman described Credit Suisse as a great wealth management business with "ancillary services." - The ancillary services being the bankers and the traders who might previously have considered themselves more central players on the pitch.
Describing a banker with a biggish ego as ancillary is unlikely to go down well, and may explain why so many people have been leaving. It could also be seen as unfair given that Credit Suisse's investment bank generated nearly CHF7bn in pre-tax profits in 2020 versus just CHF3.7m at the wealth management division, plus Credit Suisse did its utmost to woo Sanjeev Gupta as a wealth management client.
It might be that Horta-Osorio has a plan: by beasting Credit Suisse bankers and traders with comments about their insignificance, he could be persuading them to leave without severance pay. Or maybe he's just not attuned to phrases that might constitute an insult. Either way, next time you encounter someone from Credit Suisse it will help to utter soothing words.
Separately, under its new CEO Jane Fraser, Citi had been looking unusually lenient about the return to office. In last week's review of banks' return to office policies, the Financial Times put Citi in the orange group offering flexibility and a return from July at the earliest instead of June like Goldman and JPMorgan.
This may be changing, however: as rivals rally the troops back to their workstations, Citi is becoming more enthusiastic too. James Bardrick, the UK head of Citi, says he wants people back in the office soon, albeit it not full-time. “To do your job well, to develop as an employee, to get the best out of yourself and for the team, we need to be together. So, three days a week we expect people to be in the office,” he told BBC News.
Barclays poached Burcu Korkut from Credit Suisse as head of emerging markets macro sales for Europe, the Middle East and Africa. (Financial News)
“Banks are hemorrhaging junior bankers...People are quitting for better banks, they’re quitting the City or they’re jumping into private equity." (Financial News)
Treasury Secretary Steven Mnuchin held over 60 recorded calls with BlackRock on the weekend before the Federal Reserve unveiled its corporate bond buying program on March 23rd 2020. "It was done very quickly due to the urgency and need for their expertise.” (New York Times)
Citi created a new unit called GSP Quantitative Trading, which merges beta, electronic, automated trading (BEAT) business with portfolio trading, focusing on market making and risk taking in algo trading, ETF create-redeem, fixed income ETF trading and portfolio trades in spread products. (The Trade News)
Virtu Financial is providing access to its high speed data feeds via blockchain technology as it pushes into decentralized finance. (Bloomberg)
Bankers are vilified in Lebanon, where GDP has fallen 20%. Last June, veteran banker Antoine Dagher was found stabbed to death. (Financial Times)
Child-free adults are just as satisfied with their lives as parents. (BPS Digest)
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