Zurich [Switzerland], February 9 (ANI): Credit Suisse Group on Thursday said it bought Klein and Co for USD 175 million to help spin off its investment banking arm, as it posted another quarterly loss, The Wall Street Journal said.
The Swiss bank is cutting thousands of jobs to restructure and win back customers after scandals and financial losses, according to WSJ. It said its wealth management saw around USD 100 billion of customer outflows in the fourth quarter, when concerns about its financial health reached a frenzy. Credit Suisse issued new shares late last year and started breaking up its investment bank.
M. KleinCompany is a global strategic advisor to some of the largest, most complex organisations in the world, the company said in its website.
On Thursday, Credit Suisse said it completed the acquisition of New York-based Klein and Co and that Michael Klein will join the bank's executive board and lead the new investment banking spinoff -- CS First Boston, The Wall Street Journal said. The purchase, via a convertible note and a warrant, should be seen as a "strategic way to create shareholder value," Credit Suisse Chief Executive Ulrich Korner said.
The acquisition, which was anticipated, has drawn attention because until October Klein was on Credit Suisse's supervisory board, according to the Journal. He led a strategy review last summer around the investment bank. The Journal said the bank said any potential conflicts of interest were managed.
In October, Credit Suisse said it would carve out the advisory and capital markets parts of its investment bank into a new entity under the CS First Boston brand, according to WSJ. The bank has said it would raise outside capital to launch the new entity, which it hopes to eventually list in a separate initial public offering.
Reporting for the fourth quarter, Credit Suisse posted a USD 1.5-billion loss. Revenue slid 74 per cent at its investment bank and wealth management revenue fell 17 per cent. (ANI)