Credit Suisse’s financial woes continue to worsen
Credit Suisse just experienced its most significant annual loss since the 2008 financial crisis. Sparked by declining #investmentbanking revenues, and clients withdrawing from CS’ #wealthmanagement services, #creditsuisse noted an SFr 1.4bn ($1.5bn) loss for Q4, driving the bank’s annual loss to SFr 7.3bn. Shares in the company plummeted by 16%, with December seeing it reach an all-time low of SFr 2.70.
When rumours began to swirl about CS’ financial situation back in October, clients started to pull their money, about SFr 111bn in total. CS’ wealth management services saw outflows of SFr 92.7bn, which was much more than analysts’ predictions of SFR 61.9 bn.
Declining faster than expected, CS will restructure significantly in order to save itself, including by cutting 9,000 jobs. 2023 is expected to be a rough year, especially due to restructuring costs. CS hopes to sell investment bank assets worth billions by 2025 and place a greater focus on more stable private banking and wealth management operations. Their ROE is expected to be far lower than their European competitors up until 2024.
It’s not entirely surprising CS is in financial trouble, given it has been dealing with back-to-back scandals for the past few years. Its financial woes, however, now see it under greater scrutiny from regulatory bodies. Standard & Poor’s also dismally downgraded CS ratings last year. Though Chief Executive Ulrich Koerner tried to put a positive spin on things by stating they ‘have a clear plan to create a new Credit Suisse’, analysts remain worried. You know it’s bad when some analysts are wondering if Credit Suisse will be the next Lehman Brothers.
What does this mean for students aspiring for #gradjobs and #investmentbankinternship ?
It’s no secret that #assetmanagement and #investmentbanking have seen significant dip in revenue. While they remain popular amongst students for reasons like salary and prestige. However, as many banks continue cutting jobs, especially in these areas, it’s looking riskier than before. Here’s what you should do:
➡️ Keep your options OPEN. Don’t focus on only one area, such as just getting into IB. Consider other sectors to gain experience in and then pivot later on in your career.
➡️ Stay updated on big #marketnews such as this. In interviews, you’ll be tested on your knowledge of the markets. Questions may include, ‘tell us about some significant financial news,’ or ‘what do you foresee happening in the markets in the next 5-10 years?’
➡️ Look out for roles that will still be sustainable and in demand in times when major banks are feeling the brunt of volatile markets. Banks like HSBC are planning to expand their operations in Asia, meaning more opportunities for interns. Apply to multiple banks so you don’t put all your eggs in one basket.
Remember to hit 👍 share and comment if you found this helpful!
--------------------------------------------
We help university students like you to get into Investment Banking, Banking, Property/ Conglomerate and Advisory/ Consulting.
Follow us on Instagram (ig: HKCareers / ibankcoaching) to know insider tips about grad job / internship hunting.
Visit https://bit.ly/hkcareersaboutus to know more about the result-based career coaching program
