Sector developments and company hires

During its 2Q22 financial results presentation yesterday, Credit Suisse disclosed that it has been conducting a strategic review of the bank's businesses, with the goal of creating “a more focused, agile group with a significant, lower absolute cost base”. As part of this review, the bank is assessing strategic options for its securitised products business, including accelerating growth and strengthening its competitiveness by attracting third-party capital.

“We are…evaluating strategic options for our market-leading securitised products, which may include attracting third-party capital into this high-return platform and potentially freeing up additional resources for the bank's growth areas. This highly profitable global franchise, which employs around Sfr20bn of risk-weighted assets, has significant untapped growth opportunities,” said Thomas Gottstein, ceo of Credit Suisse.

The move comes as Credit Suisse reported net revenues of Sfr3.6bn and a pre-tax loss of Sfr1.2 bn, along with a CET1 ratio of 13.5% in 2Q22. The strategic review will recommend a new model for the bank, including transforming the investment bank into a capital-light, advisory-led banking business and a more sustainable markets business that complements the growth of the wealth management and Swiss bank franchises. The aim is to reduce the group's absolute cost base to below Sfr15.5bn in the medium term, while “remaining focused on improving risk management and risk culture”.

The implementation of the new strategy will be overseen by the board of directors and supported by a board-led ad hoc investment bank strategy committee, with Michael Klein as chair, and also including Mirko Bianchi, Richard Meddings and Blythe Masters.

In other news…

Hyundai penalised over credit reporting

The US CFPB has penalised Hyundai Capital America for repeatedly providing inaccurate information to nationwide credit reporting companies and failing to take proper measures to address inaccurate information once it was identified between 2016 and 2020. The Bureau found that Hyundai used outdated systems and procedures to furnish credit reporting information, which led to widespread inaccuracies and resulted in negative information being placed on consumers’ credit reports.

In total, the CFPB found that Hyundai furnished inaccurate information in more than 8.7 million instances on more than 2.2 million consumer accounts during the period. The order requires Hyundai to take steps to prevent future violations and to pay more than US$19m, including US$13.2m in redress to affected consumers that were inaccurately reported as delinquent and a US$6m civil money penalty, making this the Bureau’s largest Fair Credit Reporting Act case against an auto loan servicer.