In recent weeks, Credit Suisse finally fell through its hooves, followed by a takeover by rival UBS. But the problems of Swiss banking giant go back decades. What is the background of Credit Suisse, and why did the once solid Swiss institution fail? Look back. In 1856, the Schweizerische Kreditanstalt (SKA), later Credit Suisse, was founded in Zurich. The credit institution focuses on the financing of Swiss railways and industry. The bank grows into the top 3 in the country, alongside Union Bank of Switzerland and Swiss Bank Corporation. Because Switzerland is neutral and has a strict banking secrecy, Swiss banks play a controversial role during World War II in the diversion of assets by the Nazis. After the war, Swiss banks remain for a long time mainly national players, which continue to exert international appeal to companies and wealthy individuals who want to hide their assets or income from the sight of the tax authorities in their own country. That, and the later focus on commercial banking, later leads to a bucket of misery. 1977: Credit Suisse is hit by the so-called Chiasso affair, until then the largest banking scandal in Switzerland. The large-scale fraud by employees of the bank branch in the town of the same name on the Italian border makes the international press. Eighties: recovery of Credit Suisse. The company is transformed this decade from a rather boring National Savings Bank and lender and European asset manager into a bank that operates in all kinds of markets worldwide. 1982: Credit Suisse Holding is established as a sister company of SKA to take interests in other companies. The institution is also becoming increasingly active as an international commercial bank, assisting companies in mergers, acquisitions, IPOs and issues of shares and bonds. To this end, the Swiss will cooperate with the American Commercial Bank First Boston, which will later be acquired. 1986: Commercial Bank Credit Suisse First Boston (CSFB) also comes to the Netherlands, through the acquisition of the Amsterdam bank Jonas & Kruseman. That shakes up the sassy Dutch banking world a lot. CSFB conquers a part of the market, on which jealous Dutch bankers accuse the Swiss in the newspapers of Wild West practices. Nineties: the’ cowboys ‘ of Credit Suisse’s commercial bank make gold money, especially on Wall Street thanks to the guidance of Technology, telecom and internet companies in the capital markets. 1998: painful moment when Credit Suisse as Switzerland’s largest bank is passed by the merger of the number two UBS and number three SBC. 2000: in a competition with its rival UBS, Credit Suisse buys the American Securities bank DLJ for more than $ 10 billion at the height of the market. A few months earlier, UBS had swallowed up the American PaineWebber, for 11 billion dollars. 2001 and later: after the bursting of the tech and internet bubble, The Commercial Bank of Credit Suisse is in dispute for alleged malpractice in the nineties. Under the leadership of John Mack – nicknamed ‘The Knife’ – a major reorganization follows, in which 6000 employees lose their jobs, or 20 percent of the total. 2004-2014: period of relative calm for Credit Suisse. For example, the bank remarkably survives the credit crisis in 2008 without state aid, unlike rival UBS which requires tens of billions in aid. However, the bank suffered a mega loss of 8 billion Swiss francs that year. Ghosts of the past 2014: Credit Suisse settles a $ 2.5 billion case with U.S. authorities. The bank admits to encouraging Americans to avoid taxes in the past. In Europe, too, the bank has to settle similar cases, in 2011 in Germany (150 million euros) and in 2016 in Italy (100 million). 2016: Credit Suisse settles a case with U.S. authorities over the resale of junk mortgages that had caused the credit crunch, for a total of $ 5.3 billion. 2017: Investigative Services conduct raids in the Netherlands and other countries in the context of an investigation into black savers who had stored assets at Credit Suisse. The investigation focuses not only on the account holders, but also on the bank itself. 2019-2020: Credit Suisse is at the center of a bizarre scandal, in which a departed Bank director is revealed to have been shadowed by spies. The affair cost the head of CEO Tidjane Thiam in February 2020, who had been brought in five years earlier to clean up all the mess from the past. The Swiss Thomas Gottstein takes over that baton. 2021: Credit Suisse is hit by billions in losses and reputational damage due to the demise of two business partners; the financier Greensill and the hedge fund Archegos. Also, the bank has to pay $ 475 million to American and British authorities for involvement in a bribery and fraud case from Mozambique. Credit Suisse tries to fight its way up from the quicksand, but sinks further and further into it. 2022 February: Credit Suisse appears to have suffered a net loss of over 1.6 billion Swiss francs (1.7 billion euros) in 2021. Due to all the problems, the value of the bank’s share has almost halved over the past year, from about 12 to 7 Swiss francs. June: Credit Suisse is found guilty in a Swiss lawsuit surrounding the laundering of 19 million euros by a Bulgarian drug cartel. It is a relatively small business, but again makes you wonder whether the bank has its affairs in order. July 27: Credit Suisse puts Gottstein on the street after two years, following the scandals around Greensill and Archegos. Successor Ulrich Körner (ex-UBS) now really has to pull Credit Suisse out of the mud. October 17: Credit Suisse settles another case in the U.S. surrounding the resale of junk mortgages. Price tag: 495 million dollars. According to Reuters, This is the largest of the five remaining claims in this area. October 24: Credit Suisse settles a case with the French authorities for 238 million euros, for involvement in money laundering and tax fraud. October 27: the optimistic, brand new CEO Körner presents his restructuring plan. He wants to cut thousands of jobs and spin off Commercial Bank CSFB, which has caused so many problems. Credit Suisse raises 4 billion francs with a share issue, including from major shareholder Saudi National Bank. November 23: profit warning, in which the bank also reports that an above-average number of customers have been withdrawing their funds from the bank since October. There is no stopping at the stock exchange, in september, October and november the price drops further and further away. 2023: the end Thursday, February 9: Credit Suisse announces that it has suffered a net loss of 7.3 billion francs (7.4 billion euros) in 2022. The rate drops further again, to 2.77 francs. Compared to February 2021, the bank has lost more than three quarters of its value. Tuesday, February 28: the Swiss financial regulator FINMA taps Credit Suisse for shortcomings in the Greensill affair. Thursday, March 9: Credit Suisse postpones the publication of the annual report, because the US stock market regulator SEC still has questions about it. Friday, March 10: across the Atlantic, Silicon Valley Bank (SVB) collapses with a lot of noise. The US government takes SVB under its care and guarantees the funds of customers. Two other banks in the US are also in trouble. Monday, March 13: after the weekend, the fear of another banking crisis spills over to Europe, where after all the scandals and losses of recent years, all eyes turn to Credit Suisse, which is much larger than the US problem banks. Tuesday, March 14: Credit Suisse publishes its annual report, which states that the bank had “material deficiencies” in its internal controls on financial reporting. Customers will also continue to withdraw their money from the bank until March. Wednesday, March 15: major shareholder Saudi National Bank says it will not put new money into Credit Suisse. It is the coup de grace; that day the bank loses another quarter of its already melted market value. in the evening, the Swiss central bank throws a lifeline: the ailing bank is allowed to borrow up to 50 billion Swiss francs. Thursday, March 16: the lifebuoy initially seems to be able to keep Credit Suisse afloat and reassure investors. The bank’s share price is rising; with a plus of 20 percent. Friday, March 17: Credit Suisse is not holding on to the recovery, but the rate is falling slightly again. Investors are threatening lawsuits, as the bank would have presented the situation too rosy. Sunday, March 19: the buoyancy of the lifebuoy is insufficient. Over the weekend, Swiss authorities are forcing Credit Suisse to be acquired by its bigger brother UBS, aided by a 101 billion euro financial aid package. This marks the end of Credit Suisse’s history as an independent bank after 167 years. Last week: the financial markets remain unsettled. Market analysts are wondering what happens if the UBS/Credit Suisse combination gets into trouble, and if other banks or insurers follow suit?
