Credit Suisse CEO Grübel to retire

Grübel's plans to retire came as something of a shock Keystone

Switzerland's second-largest bank, the Credit Suisse Group, has made a surprise announcement that its CEO Oswald Grübel, aged 63, is to retire on May 4.

The news came shortly before Credit Suisse on Thursday reported that its net profit for 2006 surged to a record SFr11.327 billion ($8.62 billion), an increase of 94 per cent compared with 2005.

The CS board of directors has named the head of investment banking, Brady Dougan, to succeed Grübel.

Europe’s tenth-largest bank reported fourth quarter net profit of SFr4.673 billion, well above analysts’ forecast, as its investment banking business boomed.

The result included a net capital gain of SFr1.817 billion from the sale of the group’s Winterthur insurance business to France’s AXA.

A poll of analysts gave Reuters an average net profit forecast of SFr3.235 billion.

Record year

“2006 was a record year for Credit Suisse. Our integrated banking model proved successful and provided us with an effective platform to capture the growth opportunities arising from high levels of client activity, while at the same time significantly improving our profitability,” commented Grübel in a statement.

“In our first year as an integrated bank, we have made excellent progress in strengthening our operating efficiency but there is still great potential for further improvement as we continue to invest in the growth of our business.”

The invesment banking segment reported record income from continuing operations of SFr5.951 billion for the full year 2006, an increase of SFr4.352 billion compared with 2005, with strong contributions across the underwriting, advisory, fixed income trading and equity trading businesses.

Credit Suisse reported that its wealth management business generated SFr50.5 billion of net new assets in 2006, an increase of 18 per cent compared with 2005.

The group as a whole recorded net new assets of SFr95.4 billion for the full year.

Total assets under management were SFr1,485.1 billion at the end of December.

Good outlook

In its outlook, the group said growth prospects for the global economy would remain good and it expected client activity to continue at around the levels of 2006.

The statement added that Credit Suisse had enjoyed a “good start” to 2007 and was well positioned to capture growth opportunities with its integrated bank model introduced in January 2006.

There had been some speculation that Grübel might give some hint of his intentions this year but few investors had expected him to retire so soon.

Dougan, who was appointed in July 2004, had not been considered a front-runner to replace him.

Credit Suisse chairman Walter Kielholz said the leadership change came at a time when the company was strong.

Key to success

“We owe a great debt of gratitude to Oswald Grübel, whose leadership has been key to this success.”

“His almost 40-year career with the company was crowned by his tenure as chief executive officer, leading the successful transformation of Credit Suisse into an integrated global bank and delivering an enormous improvement in profitability and shareholder value,” he commented.

Grübel noted that his time as CEO had been “very satisfying” with the transformation of Credit Suisse into a global integrated bank under a single brand.

“Our clients have responded very positively and there is an enormous opportunity for Credit Suisse to create further value.

“As a key member of the management team, Brady Dougan has been closely involved with the development of the integrated bank and is totally committed to our strategy. I am delighted that he will be leading Credit Suisse.”

swissinfo with agencies

Key facts

2006 results

Net revenues: SFr38.603 billion (+ 27% compared with 2005)
Total operating expenses: SFr24.414 billion (+5%)
Net income: SFr11.327 billion (+94%)
Basic earnings per share: SFr10.30
New new assets for the full year: SFr95.4 billion
Number of employees: 44,871
At the shareholders’ meeting on May 4, the board will propose a cash dividend of SFr2.24 per share and a par reduction value of SFr0.46 per share.
It will also propose a share repurchase programme of up to SFr8 billion to begin after the meeting and run for a maximum of three years.

Oswald Grübel

The chief executive of Credit Suisse leaves on a high note after five years in the post. The 63-year-old has spent almost 40 years within the CS Group.

Grübel was named co-chief executive with John Mack in 2002. He became sole CEO in 2004.

He left the bank for a spell of nine months at the end of 2001 after disagreeing with strategy. At that time he was head of Credit Suisse Private Banking.

Since taking over the reins, he radically changed the strategy of his predecessor, Lukas Mühlemann. The bank had made a loss of more than SFr3 billion in 2002.

He retires on May 4, the date of the annual shareholders’ meeting.