Would you choose to invent Credit Suisse?
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Would you choose to invent Credit Suisse?

Credit Suisse is giving money back to shareholders in a sign that a three year restructuring, which has featured two rights issues, is now firmly in its rearview mirror. But as the bank has cleaned up its act and refocused on what it does best, the argument that all of its businesses should live under one roof looks increasingly strained.

Lie back, close your eyes, and let chief executive Tidjane Thiam’s words at Credit Suisse’s investor day on Wednesday wash over you,

The official strategy of the firm, to be “a leading wealth manager with strong investment banking capabilities” sounds plausible enough, and Thiam’s call that the rich would get richer (and need more banking services) has been proven right.

But in pruning the firm’s ambitions, and focusing on its best bits, his restructuring has exposed what a curious beast the Swiss bank has become.

In US markets, Credit Suisse is a powerhouse in leveraged finance and securitization, built around the Donaldson, Lufkin and Jenrette (DFJ) business it swallowed in 2000.

In Switzerland, it is a high street bank, a provider of ATMs in train stations and mortgages in Alpine villages, and has the country’s largest corporate bank and a whopping great wealth management arm to boot.

The bank’s Asian business — a separate unit — is mostly a wealth manager and a private bank, with a nice line in taking entrepreneur-owned companies public and arranging their financing through its investment bank.

This grab bag of businesses comes out in the bank’s reporting, which lurches between Swiss francs and dollars (admittedly, they are almost at parity).

US regulation limits the extent to which Swiss deposits can support US underwriting and trading, and it’s not like the bank’s high yield clients all see their offerings taken down by the middle class burghers across the cantons. Synergies exist but you might need to squint to see them.

Thiam deserves kudos for conjuring up a reason for these businesses to live together, but if Credit Suisse didn’t already exist, you have to wonder who would decide to invent it.

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