The current issues facing Credit Suisse reflect a broader issue among European banks says Blackrock Vice-Chairman and Former SNB President Philipp Hildebrand.
Credit Suisse is waging an epic battle to redefine itself with a new strategy, but it is not alone among European banks in confronting its business model, Blackrock Vice-Chairman Philipp Hildebrand in an interview with «Bloomberg» (behind paywall) TV.
Following disastrous second-quarter results, Credit Suisse said it would undertake a review of its strategy and named a new CEO with a cost-cutting reputation, Ulrich Koerner, to lead the effort.
Clarity Needed
«If you want to attract investors, you need to have the right business model. And this review in my mind is all about clarity,» Hildebrand, who also served as President of the Swiss National Bank (SNB) told Bloomberg. But this is not an issue limited to Credit Suisse. «This is what has been in many ways haunting the European banking sector for quite some time,» he said.
To be sure, there are exceptions he said, singling out BNP Paribas as one.
Credit Suisse is scheduled to announce the results of its strategic review next Thursday and has for the most part refrained from commenting on the various rumors surfacing since it announced the review in July. Rumors include asset sales, carving up the investment banks, job cuts, and capital injection, as finews.com reported.
Top Shareholders
A capital injection from the Qatar Investment Authority (QIA) is a rumored possibility. QIA, along with Blackrock and Saudi Arabian conglomerate Olayan, are among the shareholders of Credit Suisse.
Accordingly, «Credit Suisse is still in most indices, and therefore many of our clients are still invested. I would also say that I’m sure many feel this is an attractive level to re-enter,» Hildebrand told Bloomberg in response to a question as to why Blackrock still holds Credit Suisse shares.
He declined to comment on whether Blackrock would be interested in buying Credit Suisse assets such as its asset management business in the US.
Wealth Management
While still in his role as SNB president, Hildebrand said that the future of the financial industry in Switzerland was in wealth management rather than investment banking, according to «Bloomberg».
