Credit Suisse Group AG is a Swiss and multinational investment bank established and based in Switzerland. Headquartered in ZÃÆ'¼rich, it has offices in all major financial centers around the world. As the second largest bank in Switzerland, it is considered a "Bulge Bracket" bank that provides services in investment banking, private banking, asset management, and shared services. Credit Suisse is known for its strict confidentiality of confidentiality and bank secrecy practices.
Credit Suisse was founded in 1856 to fund the development of the Swiss rail system. It issued a loan that helped create the Swiss power grid and European rail system. In the 1900s, he began shifting to retail banking in response to the increasing middle class and competition from Swiss bank fellow UBS and Julius BÃÆ'¤r. Credit Suisse partnered with First Boston in 1978. After a large loan failed to place First Boston under financial pressure, Credit Suisse bought controlling bank shares in 1988. From 1990 to 2000, the company made a series of acquisitions that dramatically increased their market share through purchases of Winterthur Group, Swiss Volksbank, Swiss American Securities Inc. (SASI) and Bank Leu, among others.
The company restructured itself in 2002, 2004 and 2006. It was one of the least affected banks during the global financial crisis, but then began to shrink its investment business, layoffs and cut costs. The bank is at the center of numerous international investigations for tax evasion culminating in a plea of ​​guilt and seizure of a $ 2.6 billion fine penalty from 2008 to 2012. By 2017, Credit Suisse has CHF 1.376 trillion of assets under management, an increase of 9.9% from 2016.
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Company structure
Credit Suisse Group AG is organized as a joint-stock company registered in ZÃÆ'¼rich which operates as a holding company. It has a Credit Suisse bank and other interests in the financial services business. Credit Suisse is governed by its board of directors, shareholders and independent auditors. The Board of Directors holds the Annual General Meeting of Shareholders while investors with large shares in the company determine the agenda. Shareholders elect the auditor for a period of one year, approving the annual report and other financial statements, and having other powers granted by law. Shareholders choose board members to serve a three-year term based on candidates nominated by the Chair and Governance committee and the Board of Directors meets six times a year to vote on corporate resolutions. The Board establishes Credit Suisse's business strategy and approves the compensation principle based on guidance from the compensation committee. It also has the authority to create committees that delegate certain management functions.
Credit Suisse has two divisions, Private Banking & amp; Wealth Management and Investment Banking. The Joint Service Department provides support functions such as risk management, law, IT, and marketing to all areas. Operations are divided into four regions: Switzerland, Europe, Middle East and Africa, America and Asia Pacific. Credit Suisse Private Banking has wealth management, corporate and institutional business. Credit Suisse Investment Banking deals with securities, investment research, trading, major brokers and capital procurement. Credit Suisse Asset Management sells investment classes, alternative investments, real estate, equities, fixed income products, and other financial products.
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History
Initial history
Credit Suisse founder Alfred Escher is called "the spiritual father of the railway law of 1852," for his work defeats the idea of ​​a state-run rail system in Switzerland that supports privatization. Escher founded Credit Suisse (originally called Swiss Credit Institution, ie, Schweizerische Kreditanstalt) together with the Allgemeine Deutsche Credit-Anstalt in 1856 primarily to provide domestic funding for rail projects, avoiding the wishing French banks using influence over the rail system. Escher aims to start a company with three million shares and instead sells 218 million shares in three days. The bank was modeled after CrÃÆ'Â © at Mobilier, a bank that financed rail projects in France established two years earlier, except that Credit Suisse had a more conservative lending policy focusing on short- and medium-term loans. In its first year of operations, 25 percent of the bank's revenue comes from the Swiss Northeastern Railway, built by the Escher company, Nordostbahn.
Credit Suisse played an important role in the development of the Swiss economy, helped the country develop its currency system, funded entrepreneurship and invested in the Gotthard train, which connected Switzerland with the European rail system in 1882. Credit Suisse helped fund Swiss grid power generation through its participation with Elektrobank (now called Elektrowatt), a coalition of organizations that finance the Swiss power grid. According to The Handbook on the History of European Banks, "The young Swiss electricity industry came to assume the same importance as support for railway construction 40 years earlier." The bank also helped fund disarmament efforts and imprisoned French soldiers who crossed into the Swiss border in the Franco-Prussian War of 1870. By the end of the war, Credit Suisse had become Switzerland's largest bank.
Throughout the late 1800s, Credit Suisse established banking and insurance companies in Germany, Brussels, Geneva, and others (as an International SKA) with banks as shareholders of each company. This creates insurance companies such as Swiss RE, Swiss Life, Rentenanstalt and Schweiz. Credit Suisse suffered an unfavorable first year in 1886, due to losses in agriculture, business investment, commodities and international trade. The bank created its own sugar beet factory, purchased 25,000 shares in animal breeding businesses and supported the export business, Schweizerische Exportgesellschaft, which suffered heavy losses for too speculative investments.
In the early 1900s, Credit Suisse began to serve consumers and the middle class with counter deposits, currency exchange and savings accounts. The first branch outside ZÃÆ'¼rich opened in 1905 in Basel. The Bank assists companies affected by World War I restructuring, and extends loans for reconstruction efforts. During the 1920s depression, net income and dividends were halved and employees took pay cuts. After World War II, most of Credit Suisse's businesses were in reconstruction efforts overseas. Holocaust survivors have problems trying to take assets from relatives who died in concentration camps without a death certificate. This led to a class action lawsuit in 1996 settled in 2000 with $ 1.25 billion. The Agreement on the Swiss Bank Code of Ethics with the Due Diligence Exercise was made in the 1970s, after the Credit Suisse branch at Chiasso was hit for illegally channeling $ 900 million in Italian deposits for speculative investments.
Acquisition, growth, and First Boston
In 1978, White, Weld & amp; The company dropped its partnership with Credit Suisse after being bought by Merrill Lynch. To replace the partnership with White, Credit Suisse partnered with First Boston to create Credit Suisse First Boston in Europe and purchase 44% stake in First Boston operations in the US. In 1987, the Group acquired London Buckmaster & amp; Moore. Originally founded by Irish nobles Charles Armytage-Moore and sportsman Walter Buckmaster, who had met at Repton School. As their stockbrokers are so well connected, it has developed a good personal client business, which at one time included John Maynard Keynes.
Other brands of Credit Suisse First Boston were then made in Switzerland, Asia, London, New York and Tokyo. According to an article in The New York Times, First Boston became a "superstar of Euromarkets" by buying shares in American companies that wanted to issue bonds. In 1988, First Boston borrowed $ 487 million to Gibbons and Green for the purchase of the Ohio Mattress Company, which was purchased twenty times its annual revenue. Gibbons has also borrowed $ 475 million in junk bonds. When the junk bond market fell the following year, Gibbons was unable to repay First Boston. Credit Suisse injected $ 725 million to keep First Boston in business, which eventually led to the company being taken over by Credit Suisse. This is known as the "bed-burning" deal, as the Federal Reserve ignores the Glass-Steagall Act that requires the separation of commercial banks and investment to maintain financial market stability.
In the late 1990s, Credit Suisse embarked on an aggressive acquisition strategy. The bank acquired Bank Leu, known as Switzerland's oldest bank, in 1990. In 1993 Credit Suisse defeated UBS for controlling stake in Swiss fifth-largest Swiss bank Volksbank in a $ 1.1 billion deal. It also joined Winterthur Group in 1997 for approximately $ 9 billion and acquired the asset management division of Warburg, Pincus & amp; Co. in 1999 for $ 650 million. Donaldson, Lufkin & amp; Jenrette was purchased for $ 11.5 billion in 2000.
In 1996 Credit Suisse was restructured as Credit Suisse Group with four divisions: Credit Suisse Volksbank (then called Credit Suisse Bank) for domestic banking, Credit Suisse Private Banking, Credit Suisse Asset Management and Credit Suisse First Boston for corporate and investment banking. The restructuring is estimated to cost $ 800 million and result in 7,000 job losses, but save $ 560 million a year. While Credit Suisse First Boston has struggled, Credit Suisse's overall profit has grown 20 percent over the previous year, reaching $ 664 million. In 1999 the Japan Financial Supervisory Agency temporarily suspended the license of the financial-product division to operate in Japan for "window dressing," the practice of derivative sales that clients often use to hide losses.
In the 2000s Credit Suisse undertook a series of restructuring. In 2002 the banks were consolidated into two entities: Credit Suisse First Boston for investment and Credit Suisse Financial Services. The third unit was added in 2004 for insurance. Credit Suisse was restructured again in 2004 under the so-called "one bank" model. Under the restructuring, each board has a mix of executives from all three divisions. It also changed the compensation and commission model to encourage cross-divisional referrals and created a "solution solution" group that works between the investment division and private banking. After restructuring, the private banking division of Credit Suisse grew 19 percent annually despite the economic crisis. The company rammed UBS's long-time rival from the number one position in Euromoney's private banking poll. In 2006, Credit Suisse admitted mistakes for helping Iran and other countries hide transactions from US authorities and pay $ 536 million in settlement. That same year he merged Leu AG Bank, Clariden Holding AG, Hofmann AG Bank and BGP Banca in Gestione Patrimoniale into a new company called Clariden Leu.
The growing importance of sustainability and commitment and responsibility related to international standards such as UNGC, where banks are members, leads to increasingly sophisticated and ambitious risk management over the years. Credit Suisse operates a process since 2007 using RepRisk, the Swiss ESG Risk analysis and metric provider, to filter and evaluate environmental and social risks from risky transactions and due diligence.
In 2009, founder of Yellowstone Club, Tim Blixseth sued Credit Suisse when the bank sought to collect $ 286 million loan debt during the Yellowstone bankruptcy proceedings. Debtors have borrowed more than $ 300 million for business, but used mostly for personal use before finally filing for bankruptcy. Four lawsuits filed from another resort seeking $ 24 billion in damages stating Credit Suisse made loans with the intention of taking over their property after a default.
Post financial crisis
According to The Wall Street Journal , "Credit Suisse survived the credit crunch better than many competitors." Credit Suisse has $ 902 million in writedowns for subprime holdings and equal amounts for leveraged loans, but does not have to borrow from the government. Together with other banks, Credit Suisse is investigated and sued by US authorities to combine mortgage lending with securities, misrepresenting the underlying mortgage risk during the housing boom. After the crisis, Credit Suisse cut more than one trillion assets and made plans to cut its investment banking arm by 37 percent by 2014. This reduces the emphasis on investment banking and focuses on private banking and wealth management. In July 2011, Credit Suisse cut 2,000 jobs in response to a weaker-than-expected economic recovery and then merged its asset management with a private bank group to cut additional costs.
A series of international investigations occurred in early 2000 regarding the use of banking secrecy in Credit Suisse accounts for tax evasion. The Brazilian government investigated 13 former and Credit Suisse employees in 2008. The investigation led to the arrest that year and in 2009 as part of a larger crackdown in Brazil. Four Credit Suisse bankers are accused of fraud by the US Justice Department in 2011 for helping the wealthy Americans evade taxes. The German authorities found that citizens used insurance policies from a Bermuda-based Credit Suisse subsidiary to earn tax-free interest. In November 2012, Credit Suisse's asset management division was merged with a private banking arm. In September 2012, the Swiss government gave banks such as Credit Suisse permission to provide information to the US Department of Justice for tax evasion probes. In February 2014, they agreed to pay a fine of $ 197 million after one of its businesses served 8,500 US clients without registering its activities, which led to suspicions about whether it helped Americans avoid taxes. It was one of 14 Swiss banks under investigation. Separately, in 2013, German authorities began investigating Credit Suisse, a subsidiary of his private bank, Clariden Leu, and his subsidiary, Neue Aargauer Bank, to help Germans avoid taxes. The Bank finally signed a settlement of EUR150 million with the government.
In March 2014, Credit Suisse denied claims had been withdrawn into a Swiss competition investigation investigating the potential for collusion to manipulate foreign exchange rates by various Swiss and foreign banks. In May 2014, Credit Suisse pleaded guilty to conspiring to help tax evasion. This is the most prominent bank to plead guilty in the United States since Drexel Burnham Lambert in 1989 and the largest to do so since the Bankers Trust in 1999. "Credit Suisse conspires to help US citizens hide assets in offshore accounts to avoid paying taxes. When a bank is involved in these brash violations, it should expect that the Justice Department will pursue criminal prosecution as closely as possible, as has happened here, "Attorney General Eric H. Holder said at the time. The holder also said, "This case shows that no financial institution, no matter its size or global reach, is above the law." Credit Suisse rose 1% on a $ 2.6 billion penalty day announced.
On March 10, 2015, it was announced that Tidjane Thiam, CEO of Prudential would go on to become the next CEO of Credit Suisse. In September 2016, Brian Chin was appointed chief executive of Global Markets and joined the bank's executive board. At this time, it was also announced that Eric M. Varvel was appointed president and CEO of Credit Suisse Holdings (USA).
Financial products
Credit Suisse supports a strategy called bancassurance trying to become a single company offering every product of general financial services. The investment bank is aimed at companies and wealthy individuals with more than 50,000 euros.
Credit Suisse develops CreditRisk model risk assessment in the form of loans, which is focused exclusively on the default opportunities based on the exogenous Poisson method. In 2002, about 20 percent of Credit Suisse's revenue came from its insurance business acquired through the Winterthur acquisition in 1997. Insurance investment bank products are especially popular in the domestic market and include cars, fires, property, life, disability, pensions and pension products between other. Historically, 20-40 percent of bank income came from private banking services, one of the higher profit margin divisions.
Credit Suisse produced one of six hedge funds following the European stock index used to evaluate market performance. The investment bank also holds a 30 per cent stake in a hedge fund investment firm, York Capital Management. York sells hedge funds independently to its own clients, while Credit Suisse also offers it to private banking clients. Credit Suisse manages financial instruments from the long Dow Jones Credit Suisse/short equity index (originally called Credit Suisse/Tremont Hedge Fund Indexes).
According to a 2011 article in SeekingAlpha, Credit Suisse's investment manager supports shares in the financial, technology and energy sectors. Head of bank equity investment in Europe said that the team focused on "value with an emphasis on free cash flow." He also has an interest in companies that experience management changes that can affect stock prices. According to a story in the Wall Street Journal, the head of the International Focus Fund Credit Suisse keeps a portfolio of only 40-50 shares, not more than 100 industry norms. Credit Suisse publishes investment advice in four publications: Compass, Point of View, Research and Credit Suisse Investment Committee Report .
Reputation and ranking
Credit Suisse is a member of the Wall Street bulge bracket, listing the nine largest and most profitable banks. The company has been identified as one of the most important banks in the world, where international financial stability depends. This bank is also one of the most admired companies of Fortune magazine.
Credit Suisse has been recognized as the world's best private bank with Euromoney
Work environment
Credit Suisse is more international-minded than most European banks. According to Wetfeet's Insider Guide, Credit Suisse offers more travel opportunities, greater levels of accountability and client interaction than new employees at competing companies, but is known for hours. Analysts report 60 to 110 hours of work-weeks.
Roles and responsibilities are less rigorous and the environment is pleasant even though the hour becomes "the most grueling on Wall Street." Insider Vault's guide reaches a similar conclusion, mentioning above-average training, executive access, and openness matching reports from 80 to 100 business hours per week.
See also
- Banco Garantia
- European Financial Services Roundtable
- First Boston Corporation
References
External links
- Official website
Source of the article : Wikipedia
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