Credit Suisse – the newest history, current actions, and Luckin Coffee case

Switzerland is a country with a lot of distinctive characteristics such as alpine landscapes, cheese, chocolate, and the third-highest HDI score in the world. It is also home to a lot of organizations and companies. In the brilliant Disruption Banking piece by A. Samu, we can read more about renowned banks that have allocated their headquarters in that country – Credit Suisse and UBS.

According to “Financial Times”, UBS is the largest wealth manager on our planet with over $2.3 trillion in assets. Being the biggest player on the market evokes a competitive mood, and we are still yet to find if, and how much, their rivals at  Bank of America, JPMorgan or Credit Suisse (and more), will try to take over of that wealth.

  1. Hamersof ING took over UBS from 11.2020 and since then we could already witness some reshuffling in the Swiss giants’ structure. Andy Samu, the author of the piece, had the pleasure of meeting Hamers at Money2020. Besides recalling a great coffee, he also claims the choice of Dutch CEO as one of many great ones in the UBS structure.

Fundamental changes in Swiss Credit Suisse and UBS

UBS’s management team has been also strengthened by Iqbal Khan, who joined from… Credit Suisse. His first decisions involved cutting 500 positions from 23 000 management business.

Iqbal Khan allegedly bought a property next to Tidjane Thiam, who at the time was his CEO at Credit Suisse, and while rebuilding, Iqbal apparently had knocked Thiam’s property down. At least that was the story, that Bloomberg tried to go after. Others say that the two had fallen out because of Khan’s ambitions to rank up and concerns that Credit Suisse may not be enough for him.

Iqbal Khan is now expanding the direct contact between investment banking and the wealthiest clients. Investment bankers, according to Andy Samu, are “deal-oriented”, while private wealth managers are more “relationship-focused”. They also do not tend to mix well.

After Khan’s departure,  D. Miller got promoted to the position of Credit Suisse’s head of Investment Banking and Capital Markets. This happened in November 2019 and Miller has proven to be a completely different banker to Iqbal. It is noticeable at first glance that the two gentlemen have very different sets of goals and both prioritize other things.

Credit Suisse – the cooperation with China

Credit Suisse, like the whole world of Investment Banking, looks upon China and sees all the opportunities offered by its market and the possibility of the local companies opening to Western investments.

In April 2020 the bank informed the markets about the approval from the CSRC (China Securities Regulatory Commission) to become a majority shareholder in its securities joint ventures. That means a huge breakthrough in Credit Suisse’s strive to enter the Chinese market. The new CEO of the bank, Tomas Gottstein has confirmed that one of Credit Suisse’s long-term priorities is to invest strongly and contribute to China’s financial market. In recent years, China’s gradual opening-up to foreign investors has enabled that cooperation.

The proof for Credit Suisse’s sincere intentions could be the launch of Credit Suisse China Content Hub which offers its clients exhausting research reports, some market insights, and ideas for future investments. The CEO of Credit Suisse China Content Hub is Zhenyi Tang, who hopes that the Hub’s actions will “help clients to better understand and navigate key trends and developments in the evolving China market.”

Luckin Coffee – a story of a sudden drop in value

We can only imagine the number of responsibilities David Miller and his leadership team have, both regarding their positions, and the bizarre times they have to work in. In an interview with Bloomberg, Thomas Gottstein admitted, that the last year has been a “baptism of fire”.

The CEO has also been asked about a story of Luckin Coffee, a company which after a quick growth (with the support of Credit Suisse and Morgan Stanley) went from being valued at $12 billion to under $1billion, as the chairman Charles Lu and his family were allegedly personally “cooking the books”.

In order to read more about the Luckin Coffee value decrease and the effect it had on Credit Suisse, we invite you to visit Andy Samu’s piece on the Disruption Banking website. The author analyses the Chinese coffee market, US arrangements regarding China, and much more. To read his original piece, enter the following link: https://disruptionbanking.com/2020/06/25/a-view-to-a-coffee-suisse/.

Have Something to add?

Loading Facebook Comments ...

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.