Credit Suisse has cut its dividend dramatically, as the Swiss financial group claws its way out of its difficulties following a record SFr2.1bn ($1.39bn) loss in the third quarter. Private banking, the group’s most successful business, stalled, while CSFB, the investment banking arm, is in the throes of permanent revolution. The planned dividend cut, from CHF 2 to CHF 0.1 reflects a CHF 11 billion fall in capital since the end of 2000, a sizeable chunk (CHF 3.7 billion) of which found its way into the troubled Winterthur insurance subsidiary. The dividend cut will save around CHF2.3 billion a year, but Credit Suisse may also have to raise additional capital by other means.
Credit Suisse is under new management following the departure of CEO Lukas Muhlemann a couple of months ago. It is now led by Ossi Grbel and John Mack, a former president of Morgan Stanley, who looks after CSFB. Leonhard Fischer, 39, a former head of investment banking at Dresdner Bank is now CEO at Winterthur.