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Credit Suisse to Integrate Units By Knut Engelmann ZURICH (Reuters) - Credit Suisse will integrate investment bank Credit Suisse First Boston with its private bank and aims to float its Winterthur insurance arm, the bank said on Tuesday, setting itself tough earnings goals. Credit Suisse said it wanted to grow CSFB -- no longer seen as a top-five global player after a steep slide in rankings -- in selected areas only, effectively dropping any ambitions of competing against its major Wall Street rivals on all fronts. "This change to one bank means we want to present one face to our clients," said Chief Executive Oswald Gruebel, who has been eager to consolidate his power after the ousting of co-CEO and ex-CSFB head John Mack in June. "This will include the sharpening of our focus by creating a distinct area for our private clients and a distinct area for our corporate clients," he told an investor meeting. With the long-awaited restructuring, Gruebel aims to create a coherent group structure, paring back areas that have become unable to compete and growing others where CS thinks it has an edge. By ejecting less profitable investment banking units, he also hopes to improve the Swiss-based group's chances of surviving as an independent player in a consolidating European banking sector marked by tough markets and slow growth. The bank specifically cited areas such as leveraged finance, mergers and acquisitions, initial public offerings, derivatives, and mortgage securitisation as growth drivers for CSFB. CS also plans to create a unified global proprietary trading group at its institutional securities arm and build a commodities unit. It saw modest costs from its restructuring program but no specific restructuring charge, CSFB investment bank head Brady Dougan said. "We have underperformed financially, plain and simple," Dougan said. "If we get it right, we have a truly unique opportunity." Credit Suisse shares added to recent gains on the back of the presentation, and traded 1.9 percent higher at 0903 GMT, outperforming a flat broader European banking sector. "Credit Suisse has not come out with any great surprises. We already knew about Winterthur, and we still don't know when it's going to happen. Today's news is reassuring for shareholders but there's no positive surprise," said one dealer in Zurich. Continued ...
Source: reuters.com
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