Great quarter, guys!
Credit Suisse had a great first quarter, if you ignore one or two little hiccups. The firm enjoyed a big uptick in investment banking revenues but senior management is fighting fires lit by the double disasters of Greensill Capital and Archegos Capital.
Besides the immediate hit to earnings, which took the form of a $4.7bn charge stemming from the liquidation of Archegos, the bank now faces tough questions from shareholders and Swiss regulator Finma.
Some senior heads have already rolled, such as Brian Chin, who has been replaced at the top of the investment bank by Christian Meissner. Could a further purge be on the cards? Other than Meissner, “every member of the senior management team is on watch,” a senior banker told GlobalCapital.
The crisis overshadowed what would otherwise have been a stellar quarter for Credit Suisse, which, like many of its peers, has benefited from a boom in investment banking activity of late.
The explosion in capital markets fees has partly been fueled by a craze in the US stock market for speculative special purpose acquisition companies (Spacs), which are loved not only by retail investors on a pandemic diet of Reddit and Robinhood, but also by institutional investors chasing growth.
There are Spacs out hunting for mergers in every conceivable industry, but the quintessential target is the privately held tech start-up. Could that help to explain why Citi has dispatched its head of EMEA banking, capital markets and advisory, Phil Drury, to San Francisco to beef up its newly combined technology and communications franchise? Or did he just crave the sunshine?
Drury will continue to head up EMEA banking, capital markets and advisory (BCMA) until Citi picks a successor, who could come from within its own ranks. Meanwhile, Citi is also looking for a replacement for Michael Lavelle as head of BCMA in the UK and Ireland. He is stepping down to take on a new title within the firm as chairman of its EMEA capital markets practice.
Elsewhere, Standard Chartered is planning to eliminate its global bond syndicate leadership role and hand over the responsibilities to its regional heads, one covering the west and the other the east. The decision means that Spencer Maclean has been placed at risk. For the plan to work, however, Stan Chart will need to hire a new head of syndicate, east, after the resignation of Alan Roch earlier this month.
Other recent news includes HSBC’s appointment of long-time Wells Fargo banker Lisa McGeough as head of global banking for Europe and Matt Cooke’s move from Lloyds to Santander as head of securitization.