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No, this doesn’t mean fixed income jobs at Credit Suisse are safe

Recall the power

Recall the power

Jubilation among fixed income traders at Credit Suisse: one of their own, Gael de Boissard, is being made co-head of investment banking, head of the investment bank in both the UK and EMEA, and is being elevated to the executive board.

De Boissard, a 45 year old French man, is fixed income to the core. At Credit Suisse he has been head of global rates and FX, EMEA head of global securities and chair of the fixed income operating committee. He began his career as a fixed income trader at JPMorgan in the 1990s and was European head of fixed income trading for the US bank before joining Credit Suisse in 2001.

Surely, therefore, a fixed income cheerleader like de Boissard will prevent Credit Suisse’s fixed income business from being dismantled in the style of UBS’s? His ascension may be taken as an indication that Credit Suisse’s chairman Urs Rohner was speaking the truth a few weeks ago when he said that Credit Suisse wouldn’t be following UBS and exiting the fixed income business because it’s in a ‘different position’ [has a larger market share] and because fixed income is an important part of the bank.

Brady Dougan has been lending weight to this school of thinking. In the press release accompanying the announcement of de Boissard’s rise and the broader restructuring of the asset management and private banking businesses, he says: “We have made good progress in acting early and proactively to adapt our businesses to a fundamentally changed environment. We have restructured our investment banking model resulting in a high returning, lower risk, client oriented business.” As far as Dougan’s concerned, Credit Suisse’s restructuring is over.

Or is it?

When UBS announced its restructuring a few weeks’ ago, its share price rose 5%. Credit Suisse’s investors don’t seem as enamoured with today’s plan: the bank’s share price is down 2.5%. Is this because shareholders wanted a bigger commitment to pull back from fixed income?

Maybe so.

Rainer Skierka, analyst at Swiss private Bank Sarasin told the Wall Street Journal that, “everyone was hoping for something bigger.” Skierka informed us that just because de Boissard has been promoted, it doesn’t mean that a big pullback from fixed income won’t happen: “His level of responsibility has been increased, which will strengthen his ability to make cuts later on.”

Andrew Stimpson, an equity analyst at KBW, is of a similar opinion. “Credit Suisse’s fixed income professionals are secure until the New Year. But it’s still possible that the bank will take the decision to downsize its fixed income business in 2013, although this would involve a change of strategy,” he says.

Away from fixed income, Credit Suisse’s decision to appoint Hans-Ulrich Meister and Robert Shafir co-heads of a new division comprising private banking and wealth management, could yet play out in the manner of Paul Taubman and Colm Kelleher’s fractious co-reign at Morgan Stanley: Meister and Shafir reportedly don’t get on.

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