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Credit Suisse names Ulrich Koerner as CEO, launches strategic review as losses deepen

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The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021.

Arnd Wiegmann | Reuters

Credit Suisse on Wednesday announced that CEO Thomas Gottstein would step down as the bank reported a massive second-quarter loss, as poor investment bank performance and mounting litigation provisions hammered earnings.

The embattled Swiss bank posted a net loss of 1.593 billion Swiss francs ($1.66 billion), far below consensus expectations among analysts for a 398.16 million Swiss franc loss.

In a statement Wednesday, Gottstein said the second-quarter results were “disappointing” and that the bank’s performance was “significantly affected by a number of external factors, including geopolitical, macroeconomic and market headwinds.”

“The urgency for decisive action is clear and a comprehensive review to strengthen our pivot to the Wealth Management, Swiss Bank and Asset Management businesses, supported by a fundamental transformation of our Investment Bank, is underway,” he said.

“Today marks a leadership change for Credit Suisse. It has been an absolute privilege and honor to serve Credit Suisse over these past 23 years. It has been my passion since day one to deliver best-in-class service to our clients.”

Gottstein, who took the reins in early 2020 following the resignation of predecessor Tidjane Thiam after a spying scandal, will be replaced by Ulrich Koerner, previously CEO of the bank’s asset management division.

This comes on the back of a net loss of 273 million Swiss francs in the first quarter, as Russia-related losses and continued litigation costs arising from the Archegos hedge fund scandal dented the bank’s income.

In the second quarter of 2021, Credit Suisse’s net income reached 253 million Swiss francs, a 78% drop from the previous year, after taking a 4.4 billion franc loss following the collapse of Archegos.

Credit Suisse warned early in June that it was likely to post a loss for the quarter, citing the deteriorating geopolitical situation, aggressive monetary policy tightening from central banks and the unwinding of Covid-19 era stimulus measures.

The bank said at the time that this confluence of adverse conditions had caused “continued heightened market volatility, weak customer flows and ongoing client deleveraging, notably in the APAC region.”

Despite the challenging backdrop, Credit Suisse vowed at an Investor Deep Dive event in late June to forge ahead with its risk management and compliance overhaul, which was launched following a string of scandals and aims to reform its risk, compliance, technology and operations functions, along with the wealth management business.

Other highlights:

  • Group revenue hit 3.645 billion Swiss francs, down from 5.103 billion for the same period last year.
  • CET1 capital ratio, a measure of bank solvency, was 13.5%, compared to 13.7% at the same time last year.

The bank also faces a potential $600 million hit from a court case in Bermuda relating to it local life insurance arm, as legacy scandals continue to hammer its balance sheet.

This is a breaking news story, please check back later for more.



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Tim Draper predicts bitcoin will reach $250,000 despite FTX collapse

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Tim Draper, founder of Draper Associates, onstage at the Web Summit 2022 tech conference.

Ben McShane | Sportsfile via Getty Images

Venture capitalist Tim Draper thinks bitcoin will hit $250,000 a coin by the middle of 2023, even after a bruising year for the cryptocurrency marked by industry failures and sinking prices.

Draper previously predicted that bitcoin would top $250,000 by the end of 2022, but in early November, at the Web Summit tech conference in Lisbon, he said it would take until June 2023 for this to materialize.

He reaffirmed this position Saturday when asked how he felt about his price call following the collapse of FTX.

“I have extended my prediction by six months. $250k is still my number,” Draper told CNBC via email.

Bitcoin would need to rally nearly 1,400% from its current price of around $17,000 for Draper’s prediction to come true. The cryptocurrency has plunged over 60% since the start of the year.

Digital currencies are in the doldrums as tighter monetary policy from the Fed and a chain reaction of bankruptcies at major industry firms including Terra, Celsius and FTX have put intense pressure on prices.

FTX’s demise has also worsened an already severe liquidity crisis in the industry. Crypto exchange Gemini and lender Genesis are among the firms said to be impacted by the fallout from FTX’s insolvency.

Last week, veteran investor Mark Mobius told CNBC that bitcoin could crash to $10,000 next year, a more than 40% plunge from current prices. The co-founder of Mobius Capital Partners correctly called the drop to $20,000 this year.

Nevertheless, Draper is convinced that bitcoin, the world’s largest cryptocurrency, is set to rise in the new year.

“I expect a flight to quality and decentralized crypto like bitcoin, and for some of the weaker coins to become relics,” he told CNBC.

What is DeFi, and could it upend finance as we know it?

Draper, the founder of Draper Associates, is one of Silicon Valley’s best-known investors. He made successful bets on tech companies including Tesla, Skype and Baidu.

In 2014, Draper purchased 29,656 bitcoins confiscated by U.S. Marshals from the Silk Road dark web marketplace for $18.7 million. That year, he predicted the price of bitcoin would go to $10,000 in three years. Bitcoin went on to climb close to $20,000 in 2017.

Some of Draper’s other bets have soured, however. He invested in Theranos, a health startup that falsely claimed it was able to detect diseases with a few drops of blood. Elizabeth Holmes, Theranos’ founder, has been sentenced to 11 years in prison for fraud.

‘The dam is about to break’

Draper’s rationale for bitcoin’s breakout next year is that there remains a massive untapped demographic for bitcoin: women.

“My assumption is that, since women control 80% of retail spending and only 1 in 7 bitcoin wallets are currently held by women, the dam is about to break,” Draper said.

Crypto has long had a gender disparity problem. According to a survey conducted for CNBC and Acorns by Momentive, twice as many men as women invest in digital assets (16% of men vs. 7% of women).

“Retailers will save roughly 2% on every purchase made in bitcoin vs dollars,” Draper added. “Once retailers realize that that 2% can double their profits, bitcoin will be ubiquitous.”

Payment middlemen such as Visa and Mastercard currently charge fees as high as 2% each time credit cardholders use their card to pay for something. Bitcoin offers a way for people to bypass the middlemen.

However, using the digital coin for everyday spending is tough, since its price is very volatile and the coin is not widely accepted as currency.

“When people can buy their food, clothing and shelter all in bitcoin, they will have no use for centralized banking fiat dollars,” Draper said.

“Management of fiat is centralized and erratic. When a politician decides to spend $10 trillion, your dollars become worth about 82 cents. Then the Fed needs to raise rates to make up for the spend, and those arbitrary centralized decisions create an inconsistent economy,” he added. Fiat currencies derive their worth from their issuing government, unlike cryptocurrencies.

Meanwhile, the next so-called bitcoin halving — which cuts the bitcoin rewards to bitcoin miners — in 2024 will also boost the cryptocurrency, according to Draper, as it chokes the supply over time. The total number of bitcoins that will ever be mined is capped at 21 million.



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Three pharmaceutical stocks were top performers last week

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George Clooney, Gladys Knight among Kennedy Center honorees

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Secretary of State Antony Blinken, second from left, and his wife, Evan Ryan, left, join 2022 Kennedy Center Honorees, front row from left, Amy Grant, Gladys Knight, George Clooney, Tania León, and Kennedy Center President Deborah Rutter, back row from left, Kennedy Center Chairman David Rubenstein, along with fellow 2022 Honorees Adam Clayton, Larry Mullen Jr., The Edge, and Bono for a group photo at the State Department following the Kennedy Center Honors gala dinner, Saturday, Dec. 3, 2022, in Washington.

Kevin Wolf | AP Photo

Performers such as Gladys Knight or the Irish band U2 usually would be headlining a concert for thousands but at Sunday’s Kennedy Center Honors the tables will be turned as they and other artists will be the ones feted for their lifetime of artistic contributions.

Actor, director, producer and human rights activist George Clooney, groundbreaking composer and conductor Tania León, and contemporary Christian singer Amy Grant will join Knight and the entire crew of U2 in being honored by the John F. Kennedy Center for the Performing Arts.

The organization honors a select group of people every year for their artistic influences on American culture. President Joe Biden, Vice President Kamala Harris and their respective spouses are slated to attend.

The 61-year-old Clooney — the actor among this year’s musically leaning group of honorees — has television credits going back into the late 1970s but became a household name with the role of Doug Ross on the television show “ER.” conductor Tania León, and

From there he starred in movies such as “Three Kings,” “Ocean’s Eleven” (and “Twelve” and “Thirteen”), “O Brother, Where Art Thou?” and his most recent film, “Ticket to Paradise.” He also has extensive directing and producing credits including “Good Night, and Good Luck.” He and his wife, humanitarian rights lawyer Amal Clooney, created the Clooney Foundation for Justice, and he’s produced telethons to raise money for various causes.

“To be mentioned in the same breath with the rest of these incredible artists is an honor. This is a genuinely exciting surprise for the whole Clooney family,” said Clooney in a statement on the Center’s website.

Knight, 78, said in a statement that she was “humbled beyond words” at receiving the Kennedy honor. The Georgia-born Knight began singing gospel music at the age of 4 and went on to a career that has spanned decades.

Knight and family members started a band that would later be known as Gladys Knight & The Pips and produced their first album in 1960 when Knight was just 16. Since then she’s recorded dozens of albums with such classic hits as “I Heard It Through the Grapevine” and “Midnight Train to Georgia.” Along the way she’s acted in television shows and movies. When Knight and the band were inducted into the Rock & Roll Hall of Fame, Mariah Carey described Knight as “a textbook you learn from.”

Sometimes the Kennedy Center honors not just individuals but groups; “Sesame Street” once got the nod.

This year it’s the band U2. The group’s strong connection to America goes back decades. They performed in Washington during their first trip to America in 1980. In a statement the band — made up of Bono, The Edge, Adam Clayton and Larry Mullen Jr. — said they originally came to America with big dreams “fueled in part by the commonly held belief at home that America smiles on Ireland.”

“And it turned out to be true, yet again,” read the statement. “It has been a four-decade love affair with the country and its people, its artists, and culture.”

U2 has sold 170 million albums and been honored with 22 Grammys. The band’s epic singles include “I Still Haven’t Found What I’m Looking For,” “Pride (In the Name of Love)” and “Sunday Bloody Sunday.” Lead singer Bono has also become known for his philanthropic work to eradicate poverty and to raise awareness about AIDS.

Christian music performed Amy Grant said in an interview with The Associated Press that she’d never even been to the Kennedy Center Honors even though her husband, country musician Vince Gill, has performed during previous ceremonies. Grammy winner Grant is well known for crossover pop hits like “Baby, Baby,” “Every Heartbeat” and “That’s What Love is For.” She’s sold more than 30 million albums, including her 1991 record “Heart in Motion,” which introduced her to a larger pop audience.

Composer and conductor León said during an interview when the honorees were announced that she wasn’t expecting “anything spectacular” when the Kennedy Center initially reached out to her. After all, she’s worked with the Kennedy Center numerous times over the years going back to 1980, when she was commissioned to compose music for a play.

But the 79-year-old Pulitzer Prize winner said she was stunned to learn that this time the ceremony was going to be for her.

León left Cuba as a refugee in 1967 and eventually settled in New York City. She’s a founding member of the Dance Theatre of Harlem and instituted the Brooklyn Philharmonic Community Concert Series.



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