Credit Suisse demise - least attractive bank

Credit Suisse, once the best Swiss bank, is today barely surviving. Rumour has it that CS will be shrinking Investment Banking to increase focus on Wealth Management. The decline started well before Archegos, but Archegos losses and subsequent drop in share price (and thus drop in comp for senior bankers) led to the unseen exodus of CS bankers leaving for the competition. League tables reveal that CS places well below all other bulge bracket banks (worse than UBS and DB!) for the past three years and this does not even capture the departures of top talent and senior bankers - who were bringing the business in.

Recently, the sentiment on the buyside towards CS changed, in a similar fashion it did with DB few years back. It's becoming harder and harder to exit into top shops from Credit Suisse and it is very possible that Credit Suisse IBD will be either completely closed down in a few years or reduced to an insignificant size. 

Either way, Credit Suisse should no longer be classified as Bulge Bracket.

Bloomberg:

Credit Suisse Exodus in Full Swing as More Senior Bankers Leave

https://www.bloomberg Dot com/news/articles/2021-07-20/credit-suisse-exodus-in-full-swing-as-more-senior-bankers-leave?srnd=premium-europe

Comments (56)

Most Helpful
  • Analyst 1 in IB - Cov
Jul 21, 2021 - 5:40am

Found the UBS/DB analyst.

Can you please show the mentioned league tables? And can you substantiate and elaborate on the the claim that "Recently, the sentiment on the buyside towards CS changed"?

  • Analyst 1 in IB - Cov
Jul 21, 2021 - 8:10am

Yeah those claims are completely, entirely false. Pull up any league table (US only, global, M&A, equity) and you'll see CS significantly (20-40%) above either of them

  • Associate 2 in PE - Growth
Jul 21, 2021 - 8:35am

This is clearly a troll ("therefore, CS should not be considered a BB anymore") but I'll entertain it anyway. 
 

Please don't spread misinformation.

If you look at any recent league table (I just did this), no matter the source, CS is 6th or 7th, significantly above UBS and DB. Significantly. 
 

the buy-side claim is completely unsubstantiated. Perhaps buy-side reputation will catch up in a few years but it's illogical to think it has already degraded. Analyst 1s and 2s at CS signed their contract 2-3 years ago.. if talent were to avoid going to CS, it won't manifest for 2-3 years at least. My UMM GE shop (west coast) just had a conversation about banks for the upcoming A2 cycle and we have CS ranked where we have every other year even considering this: among the best of the non-GS,MS,JPM  bulge brackets (although this is a tech-centric ranking). 
 

the claim of IB being "shut down" in 2-3 years is equally unreasonable. If you're going to comp CS to UBS and DB (much closer comp to Barcap at the moment), recognize that after their respective fiascos and IB skepticism that they are still fully operating in IB

Lastly, I won't fail to recognize that CS has a lot to overcome given senior departures and shareholder skepticism of the investment bank, but this situation has been developing in real-time and it is way too premature judgements about league tables in 5 years. It should be pretty obvious, however, that reputation (especially among the buy side) lags league tables by a handful of years. Given CS's historically strong buy-side reputation, I would expect it to take even longer, on top of the talent-cycle delay ive already discussed. 
 

Keep your eyes on the talent reshuffle and language from the CEO on the future of IB, but your claims are way ahead of schedule and, at the moment, just false. 

  • Incoming Analyst in IB-M&A
Jul 21, 2021 - 9:36am

Mind sharing that entire ranking? I'm curious

  • Analyst 2 in IB - Cov
Aug 9, 2021 - 10:34am

Mind sharing that entire ranking? I'm curious

Also curious about this.  How many banks are you ranking? Always just thought it was an informal guideline not an exercise where firms are reranking banks each year.

  • Intern in PE - LBOs
Jul 21, 2021 - 12:15pm

Didn't know JPM is up there with MS and GS in tech-centric ranking, especially on the west coast

  • Analyst 2 in IB-M&A
Jul 21, 2021 - 2:39pm

I don't think he's saying they are. They're kind of on their own island between GS/MS/Q and the rest of the BBs when it comes to tech. Below them, CS and BofA stand out the most.

  • Analyst 2 in IB-M&A
Jul 21, 2021 - 2:37pm

Completely agree with all points. Slightly more skeptical of the future but completely agree that buyside recruiting reputation won't change for at least a few years.

  • Analyst 1 in IB - Cov
Jul 21, 2021 - 8:43am

Clearly a troll lmaoo no post history and no SBs. 
 

"once the best Swiss bank" "should no longer be classified as a bulge bracket"

get off WSO with your burner account. 
 

look at any league table, you're just wrong. I have no skin in this game but you're just talking absolute BS

  • Analyst 2 in IB-M&A
Jul 21, 2021 - 9:13am
  • Intern in IB - Gen
Jul 21, 2021 - 11:59am

There was a post about this the other week, I just bumped the thread 

  • Analyst 1 in Risk Mnmgt
Jul 21, 2021 - 7:59pm

This is 100% the case. Credit Suisse was always known for having more risk tolerance and having very borrower friendly terms before recent events. There definitely seems to be a shift now in their appetite for risk.

  • Analyst 1 in IB-M&A
Jul 21, 2021 - 11:15am

Work at an EB so no horse in the race, but, while this OP is obviously full of shit, I think there is some factual backing to the post? I don't think CS is going anywbere now, but I think if I were a sophomore recruiting for IB I would be a bit more skeptical given the ~5y trajectory it seems like CS IB is on. Again, I'm not attacking you analysts there now who signed years back, but I would personally be a bit wary?

Jul 21, 2021 - 8:55pm
ThatOtherGuy, what's your opinion? Comment below:

I entered ER at CS right as they were reshuffling the department and Tijane (then CEO) was restructuring the firm to better align the investment bank with wealth management. I voiced my concern to this forum and the consensus reassured me that research will still be a priority and a key point to the firm's strategy. Overall, that sentiment was true I ended up sticking with my return offer at CS instead of trying to jump ship BUT I completely underestimated the headcount/corporate chaos that would pursue with such a strategy change.

During my time there, half the floor turned over with senior analysts leaving left and right. Once again, the general consensus was "yes there's turnover but just at the upper management level since junior headcount is cheap" which logically made sense but ~1 year into my job full-time, 25% of my analyst class was let go in the midst of the chaos. I was almost culled except my senior analyst vouched for me pretty hard. 

So my warning is this: Yes, CS will likely still be a BB after this chaos and they'll come out right but the friction that would occur because of reorganization cannot be taken lightly, even as a junior. I would take a steady MM shop over a reorganizing BB where you're looking over your shoulder before you can even jump to PE or whatever.

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  • 6
  • Associate 1 in IB-M&A
Jul 22, 2021 - 11:43am

If I was a graduate student choosing between identical two offers from DB and CS, I would choose DB

Jul 22, 2021 - 5:42pm
Disjoint, what's your opinion? Comment below:

Troll - here is my two cents:

Look up the definition of what a BB is.

Banks get reshuffled all the time - CS is entering a painful phase. There will be some reshuffling in the fall. Either they do it right, or they do it wrong.

Some departments will get the chop (I am looking at you prime brokerage) some departments will get added resources and cash (the right type of PB!)

Maybe some businesses will be sold (to be frank if they do that, could be very well be one of those sell at the top story and we will be laughing in 5 years at whichever dumb bank bought the business)

Bottom line is: it's banking - I've been in it for many years. The most important thing is not the bank, but the group you join, anywhere you go...

  • Intern in IB - Gen
Jul 23, 2021 - 7:52pm

Know a lot of senior bankers who were part of the firm for 20+ years that left recently. Their industrials group (arguably top coverage group) just fell apart with both heads, head of industrials M&A, and multiple senior MDs leaving. Exits from CS LA (their strongest office) as well. This post over-exaggerates, but I would not take CS unless your only other options are other European BBs

Jul 24, 2021 - 3:10am
Jamie_Diamond, what's your opinion? Comment below:

CS equity research reminds me of my 5th grade book reports

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Jul 24, 2021 - 5:13am
TheBuellerBanker, what's your opinion? Comment below:

Not true at all.

The Greensill and Archegos failures put a lot more pressure on management to clamp down on their risk management practices and part of that meant reiterating their messaging to the street that they were at core a wealth manager which offered investment banking services. These failures coupled with that messaging led to a mass exodus of senior bankers who didn't want to be associated with the brand (we must remember that senior bankers simply see their bank as the platform for their P&L and anything which could potentially mess it up for them is swiftly dealt with by moving to a new platform with a non-tarnished reputation ). However, CS has incumbents in place for the recently vacated seats and while they may not have taken the roles under great circumstances, the bank will move on. CS will not stop it's investment banking activities due to senior departures. Yes they have and will continue to take a hit in terms of reputation with all the departures but they will not lose their bulge status given their service capabilities they've offered over the last many years. To be clear, I think they have and will take a severe hit in terms of wallet share compared to their bulge counterparts but I just wouldn't take them out of the bulge bracket.

  • 7
  • Intern in IB - Gen
Jul 24, 2021 - 3:15pm

As an intern right now who would be starting FT in 2022, how do you all think this would affect PE recruiting for me? Note that I'm interning in one of the stronger groups (i.e. Sponsors, lev fin, M&A, tech)

  • Analyst 1 in IB - Cov
Jul 24, 2021 - 3:24pm

Assuming you are interested in vanilla PE, LevFin is not very good, and that was also the case prior to these events.

For the other groups, it is hard to tell the exact effects. If I had to guess, I would think that the effects are minimal since you would be recruiting for PE in ~3 years, at which point the firm's IB-division has likely recovered. 

  • Intern in IB - Gen
Jul 24, 2021 - 3:26pm

Would I not be recruiting for PE early on after I start FT in ~ 1 year given the accelerated on cycle recruitment?

Aug 9, 2021 - 10:27am
txbanker5, what's your opinion? Comment below:

CS has issues that need to be resolved, but to put them on the UBS or DB level is just wrong. Different class. Who knows what the next 3-4 years bring, but this comment is premature to say the least.

  • Analyst 1 in IB - Cov
Aug 9, 2021 - 10:43am

10000%. Very respectable name dealing with broader issues within the business. IB just had a banner year before the losses

  • Analyst 1 in IB - Cov
Aug 11, 2021 - 5:06pm

Fees are super misleading/inaccurate - deal table by value would be a better indicator imo. Nonetheless, I agree that the concerns around CS IBD are somewhat premature and its still a great bank

  • Analyst 1 in IB - Cov
Aug 11, 2021 - 5:08pm

Value can be super misleading/inaccurate as well. Has potential to hugely benefit balance sheet banks. You probably want to use a combination of methodologies to get a reasonable perspective.

Aug 12, 2021 - 3:09am
curiousgeorge21, what's your opinion? Comment below:

Agree that CS is still a strong Euro brand but Fortune league tables can be very inaccurate. Banks don't disclose fees as UA isn't registered with SEC. Better place to look is MergerMarket

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  • Analyst 1 in IB-M&A
Aug 11, 2021 - 5:51pm

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  • Associate 1 in IB - Gen
Aug 12, 2021 - 10:59am

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