Credit Suisse survived two world wars, two pandemics and several recessions, but it did not resist the mix of voracity and mismanagement of a group of managers who chained scandals, excessive risks and heavy losses until ending up with a Swiss symbol as obvious as the chocolate or watches.
The brand, closely linked to the development of the railway and the once considered discreet and reliable local banking system, will disappear definitively in 2025 after 169 years of history, and languishes like a living dead after its emergency absorption by UBS, its biggest rival, occurred almost a year ago.
The imminent arrival of the anniversary prompts debates about its abrupt end.
Was your sale the best solution?
Could the fiasco that hit the self-esteem of an entire nation have been avoided?
The best news is that the contagion to the rest of the financial system was cut short, but Swiss journalist Yves Genier, author of the book
Scandales chez Credit Suisse
, argues that a temporary nationalization of the bank would have been a less bad remedy.
“In March last year, the biggest risk was that a massive loss of confidence in the bank would cause a flight of clients and capital.
If a nationalization had been announced, I believe that this stampede would have stopped, and therefore the bank would have been saved, which would have allowed two large banks to be preserved in Switzerland, instead of just one.
Unfortunately, our Finance Minister, Karin Keller-Sutter, despite her iron lady appearance, did not have enough courage to do it,” she laments in conversation with this newspaper.
Leopoldo Torralba, of the Spanish investment bank Arcano, is less critical of the way the crisis is managed.
“In retrospect, the absorption by UBS was a good solution, because it helped calm investors.
Furthermore, bank depositors were no longer so scared and there were no feared massive outflows of deposits that could have very seriously derailed the global economy,” he defends.
That is to say, although those days there was anxiety both in the markets - with a dazzling fall in shares - and on the street, with many clients worried about the possibility of their savings being trapped, the greatest evil was avoided.
The division over the express arrangement fades when it comes to talking about the winners: a year later, there is consensus that the undisputed beneficiary of the operation is UBS.
In the first quarterly results that followed the merger, between last March and June, it obtained a net profit of 26,459 million euros thanks to an extraordinary note derived from the agreement.
Never has a bank earned so much in a single quarter.
The entity's shares reflect this improvement: they have appreciated more than 35% in one year, reaching 16-year highs this Friday, catapulting its value to 90 billion euros, as much as BBVA and CaixaBank combined.
It is already the second largest bank in Europe after the British HSBC.
Not only that.
UBS has devoured its competition in Switzerland at a bargain price – it paid only €3 billion for Credit Suisse.
And it has gained enough muscle to rub shoulders with the large global banks.
Finance professor at the University of Zurich Marc Chesney, skeptical of the deal, summarizes the transaction in one sentence.
“It was good for UBS and bad for Switzerland.”
UBS not only took advantage of a knockdown price, but also of the support of the State, which did not want to leave Credit Suisse in foreign hands and opted to create a national champion.
“The real value of Credit Suisse was much higher than the 3 billion that were paid for it.
And as always, the taxpayer covered the risks.
The State offered UBS a public guarantee.
In the end he didn't need it and they have done an interesting business,” continues Chesney.
In his opinion, banking concentration means that the margin of error has disappeared.
“The problem is for the future.
UBS is a giant, and that is dangerous.
If it explodes, as it almost did in 2008, the taxpayer pays.
They want to compare themselves with the big banks in the US and Europe, but Switzerland's GDP is much smaller.
If more risks are taken and it doesn't turn out well... Who saves him?
Genier agrees.
“It eliminated a major competitor by paying less than 10% of its book value;
strengthened his position as a global asset manager;
“It reinforced its own funds, and although the regulator has increased its supervision means, it has incomparable weight with regulators and politicians.”
From within UBS, a Latin American executive who has worked at the Zurich headquarters for more than a decade, but prefers to remain anonymous, explains the prevailing feeling.
“At the bank level, the
feeling
is that for UBS it was a super business.
They gave him a bench.
The Swiss government had a very big political problem, it delegated it to UBS and gave it all the guarantees.
“They poured water into the mill to keep it running.”
The internal digestion, he explains, is far from being over: multiple duplications are still being dealt with, and more layoffs are pending.
A few months ago, 35,000 workers were expected to leave the new UBS, or 30% of the workforce, but that figure may change.
Other banks are taking advantage of the rout to draw on that talent.
Banco Santander has hired dozens of former Credit Suisse executives, including David Miller, co-director of investment banking until his rescue.
Rigid controls
One of the areas that is having the most work, according to the manager, is Compliance, which analyzes the suitability of each client.
“The work spirits are different.
Credit Suisse is more
risk taking
, and UBS is much more conservative in the Wealth Management part.
We all know the reasons why Credit Suisse was in the press everywhere in the last 10 years, so the controls have become more rigid.
"Sometimes they don't pass them because those high-risk profiles are not interesting."
The days before the fall of Credit Suisse were very profitable for some UBS bankers, who raised new money very easily amid the flight of funds from their rival.
Once the integration is agreed, they no longer receive any bonus for the capital that comes from Credit Suisse, already part of the UBS ecosystem.
What lessons can be drawn from the Credit Suisse failure?
Leopoldo Torralba, from Arcano, finds a very clear one.
“An investor should never trust financial entities that have shown improved risk management, because a bank operates with hardly any of its own resources, so a slight failure can put it close to bankruptcy.”
Above, he hopes they have also taken note.
“Bank managers will be more reliable, because they have seen what can happen to them if they are not: falls in the value of stocks and bonds, and jobs at risk.”
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