Credit Suisse received investments for new business development
Conglomerate Credit Suisse, which is the second largest in Switzerland, is creating its own investment bank. The company has attracted investors such as Mohammed bin Salman, the prince of Saudi Arabia, and an investment firm headed by a former director of Barclays. The total amount of investment was $500 million, but Credit Suisse received several other offers from investors.
First Boston Bank, which is owned by the Swiss conglomerate, is in New York. And now it will be separated into a separate business. One of the reasons for this decision was the numerous scandals that accompanied the bank. It has been repeatedly checked by regulators, and the structure incurred serious losses. Now Credit Suisse hopes that the transformation will help the business improve its performance.
The decision to create a separate bank is part of a series of changes that Credit Suisse has recently been making to its structure. For example, in October 2022, the bank announced the sale of its hotel Savoy, which is located in one of the central districts of Zurich. According to the bank’s management, the reason for this step is the revision of its real estate portfolio, which is associated with a new strategy for business development. Now Credit Suisse is considering various offers from potential buyers but has not yet accepted any of them.
The hotel was built nearly 200 years ago and was closed for renovation in 2022. Once again luxury rooms will be available for guests in 2024, but now the brand name Hotel Mandarin will be added to the traditional name Savoy Zurich. Experts believe that the cost of the hotel could reach 408 million dollars.
Credit Suisse continues its gradual recovery from the crisis in 2021. At that time, the bank suffered serious losses of about $5 billion because of the bankruptcy of the investment company Archegos. To compensate for the losses, the conglomerate reduced dividend payments, terminated the share buyback procedure, and changed management. In addition, Credit Suisse is considering possible options to sell assets that will help get back to profitability.
Another test for the business and its image was the scandal at the beginning of 2022 when publications appeared in the media that Credit Suisse bank accounts held large amounts of depositors who were engaged in illegal activities. Journalists were sent to leaked documents from the bank itself, which contained lists of citizens from various countries, including politicians, whose capital was earned illegally. The bank itself denies all accusations, but Switzerland’s legal framework has drawn criticism from European officials for some time. They accuse the country of facilitating money laundering mechanisms.
