Credit Suisse (CS) made a bold move towards restoring its troubled Winterthur Insurance subsidiary by appointing Leonhard Fischer, the former head of Allianz’ investment banking operations Dresdner Kleinwort Benson, as the group’s new CEO.
“I have clearly not been given the task of selling Winterthur but to lead it back to profitability,” Fischer was reported to have told Reuters News Agency on the sidelines of a news conference held today by Credit Suisse to announce its financial results. The bank reported a record net loss of SwF 2.1 billion ($1.45 billion) in the third quarter, slightly worse than analysts had forecast, and said it “remained cautious” about the fourth quarter.
Along with the current investigation of Credit Suisse First Boston, CS’ finances have been battered by recent decreases in global equity values, which hit Winterthur particularly hard. So far this year the bank has had to make capital injections of SwF 3.7 billion ($2.56 billion) to shore up its insurance subsidiary.
The choice of Fischer, a widely known expert in investment banking, but a newcomer to the insurance industry, as Winterthur’s new head underscores the importance that CS new co-CEO’s Oswald Grübel and John Mack are placing on financial restructuring. According to Reuters one of his first moves will be to combine Winterthur’s life and non-life operations, and streamline the group’s operations.
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