Ulrich Koerner, the man who tried to hold Credit Suisse together -Dlight News

Ulrich Koerner, the man who tried to hold Credit Suisse together

In another life, Ulrich Koerner would be best known for trying to save an isolated Swiss bank from collapse.

In September 2011, UBS was in disarray after rogue trader Kweku Adoboli lost $2.3 billion and forced Chief Executive Oswald Grubel to resign. As the board scrambled to find a replacement, early press release drafts contained a placeholder for the new CEO’s name: “UK”. But Koerner, then chief operating officer and deputy CEO, refused to take on an interim role – he wanted the bank’s full support. The board delayed and the draft was quickly updated with new initials: “SPE”. Sergio Pietro Ermotti took his chance and ran the lender for a largely successful decade.

Eleven years later, the reserved corner has another chance to stabilize a national institution facing an existential crisis: this time UBS’s fiercest rival Credit Suisse. It’s been a rocky start. During his eight-month tenure, shares have fallen 63 percent as the bank reported its second consecutive multibillion loss and panicked customers withdrew SFr111bn ($121bn) in funds.

Credit Suisse hit a nadir this week when its largest investor refused to provide more capital, turbocharging market contagion from the failure of the Silicon Valley bank. Its debt slipped into distressed value and it was forced to apply to the Swiss National Bank for a SFr50bn lifeline. But even a backstop from their fabled bullion stockpiles failed to stem the bleeding. Speculation has swirled about bankruptcy, a break-up or a state-planned rescue by UBS. “The status quo is no longer an option,” says JPMorgan analyst Kian Abuhossein.

Is Koerner – described by one colleague as “unambiguous, albeit the most stressful job in banking” and by another as having a “preternatural ability to absorb pressure” – the right man to hold the bank together?

“Uli may come across as an introvert, but he’s consistently likeable, smart and intelligent, and in many cases he’s the best guy in a crisis,” says Ermotti, a former UBS chief executive. “But at the time he took the job, it was like a firefighter being asked to run into a burning building. It is extremely challenging and difficult to turn this around.”

Koerner, 60, was born in Germany but went to Swiss school and holds dual citizenship. He began his career at Price Waterhouse before joining McKinsey. In 1998, he joined Credit Suisse and became head of Switzerland.

“He was a very quiet person, he kept his advice to himself,” says Kai Nargowala, who left the Credit Suisse board last year. “At that time the place was dominated by Americans [former CEO] Brady Dougan and [former asset management boss] Eric Verwell, and as you know Americans like to have a lot of oxygen in the room. Uli was silent but effective.

Corner went to UBS in 2009. Ermotti tasked him with reducing the bloated corporate center and turning around the asset management unit, crediting him with “a fantastic job”. It was there that he earned the nickname “Ully the Knife” for his frugal spending cuts.

Koerner returned to Credit Suisse in April 2021 to help deal with the Greensil Capital scandal, when the asset management unit was forced to freeze a $10bn investment fund amid allegations of fraud. At the same time, the crisis deepened when the bank lost $5.5bn on the collapse of family office Archagos.

Nargowala says Credit Suisse “went into analysis paralysis, it couldn’t decide on anything”. “At this stage it needs some clear direction, and Uli has tried to provide that.”

According to one board member, choosing Corner was an attempt to break the pattern of more flamboyant leaders whose terms had become discredited. “Uli is no showman, but a very fact-based and sober business leader,” says the board member. “Journalists may find it less exciting. But that’s what we need.”

However, his blunt, data-led communication style has failed to put investors at ease. Nor has it been able to stem the exodus of clients from the wealth management division, a key to Credit Suisse’s ability to survive. “Uli repeats it [the bank] A rival Swiss banking executive says it has high liquidity and capital so is safe and sound, but given that, that’s not reassuring. “The style and pace at which things are being done is a concern.”

David Harrow, a former top investor at Harris Associates, has also criticized the deal Koerner approved with a board member. Michael Klein orchestrated a spinout into the investment banking business, not only buying his own firm for $175mn, but also negotiating a $10mn fee for his advice.

“He’s never run an investment bank so he’s at the mercy of people like Klein, who are running rings around him,” says a senior colleague. “Also, he has never run wealth management or worked outside of Switzerland, so he doesn’t have the network to fact-check and navigate these global strategic decisions.”

Outside of work, Corner’s personality is more colorful. He has three children — and three dogs: a dogo argentino, a Boston terrier and a German wire-hair pointer — and lives in the Engadine, an alpine valley where he hikes and skis. He is also sociable and loves a drink, favoring wine.

But he is best known in Zurich as a “petrolhead” and rally driver. He takes a different classic Porsche from his collection to the office every day. In 2013 he raced a customized in the “Peking to Paris Motor Challenge”. Gray 1972 Porsche 911 And he negotiated the UBS sponsorship of Formula 1, claiming to colleagues that he got the better of Bernie Ecclestone.

Since taking office in July, he has told friends he has been too busy with the race. However, if he is unable to raise Credit Suisse shares soon, he may have more time to fulfill his passion.


Source link