Thomas Gottstein was accused of not knowing his math. As Credit Suisse's Swiss boss prepares to prove his doubters wrong, he tells finews.com about his erstwhile boss Marco Illy's defection to UBS and why he isn't just making friends.
Thomas Gottstein, let's not talk about profit targets for once. Why is banking still interesting?
The fact that you have to continually keep moving: there are always new challenges, we're in a very dynamic industry. We're confronted with negative interest rates as much as we are the debate about European market access.
Then there's digitization, especially as Credit Suisse's Swiss universal bank, which is active in just about every segment – private banking, corporate clients, institutional as well as retail banking. We're really not short of excitement here.
Your background is investment banking, but you also spent part of your career with ultra-rich clients. What are the big differences in the two businesses?
Both private banking and investment banking are rooted in relationships developed over years, and based on trust. The differences are in the technical details. When I took over the Swiss business, Credit Suisse's profitability here was average.
«We're largely on a first-name basis now»
We weren't winning any or too few scale effects and our staff and general expenses as well as our cost of capital were too high. There were a lot of inefficient set-ups and processes, a lot of things were too decentralized, and we had a too hierarchical structure. Everyone was very formal with one another.
How is it now?
For the large part, we're on a first-name basis now. In investment banking, I was used to approaching people directly, even younger staff. That wasn't necessarily the case in the Swiss business. A lot of meetings were organized by a staff functions, and not the business.
«We cut a layer of management»
I wanted the client-facing employees to be able to make faster decisions so that the the front people didn't have to fight their way through four layers before they could give clients an answer. That's why we removed one layer of management. Those who were affected obviously weren't happy, but those beneath them were – they effectively move up one rank.
In other words, you injected some investment banking culture into the stodgy Swiss business.
Yes, though investment banking always carries negative connotations here in Switzerland. But we're certainly less hierarchically organized, and the client-facing bankers have more authority. We also fostered cooperation in Switzerland's regions with new incentive systems, to get rid of a certain degree of «silo»-type thinking.
How close to clients are you?
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