Switzerland-based global investment bank and financial services firm Credit Suisse is fighting for its survival after the credit default swaps jumped 6 basis points to close to 247 basis points on Friday, the highest level in at least 10 years.
According to a Financial Times report, Credit Suisse executives spent the weekend reassuring large clients, counterparties and investors and have requested less than 100 days to deliver a new turnaround strategy.
Credit Suisse has been facing turbulence in the market for at least one year. In March 2021, the company had a market capitalization of 30 billion Swiss francs ($30.35 billion), while it is just 10 billion Swiss francs now.
On Friday, Credit Suisse CEO Ulrich Koerner reassured staff that the bank has a strong capital base and told the employees that he will send regular updates on the progress until it announces its new strategic plan on Oct. 27.
“I am conscious that there is lots of uncertainty and speculation both outside and within the company. While you will appreciate that I am unable to share details of our transformation plans before Oct. 27, I also want to make sure that you hear from me directly during this challenging period,” Korner told employees in a memo dated Sept. 30.
According to a Bloomberg report, Credit Suisse is now busy finalizing plans that will likely see sweeping changes to its investment bank and may even result in cutting its workforce by thousands.
Last week Credit Suisse revealed that it is considering a possible sale of some assets and business as part of its strategic plan. Bloomberg reported that the bank is eyeing selling its securitized products trading unit, and is weighing the sale of its Latin American wealth management operations excluding Brazil.
The report added that Credit Suisse is also considering reviving the First Boston brand name.