Next time a bank tells you you’re a valued employee working in a core strategic business with a great future, accord it as much credence as a Russian autocrat who accepts Crimean independence. Bank’s assurances aren’t to be trusted. And Credit Suisse has done a fine job demonstrating why this is so.
Along with its second quarter results today, Credit Suisse declared that it was getting out of the commodities business. It said that client activity in commodities had been, ‘subdued,’ and that the commodities business is being wound down so that the capital currently allocated to commodities can be reassigned to more profitable areas instead. 80 jobs are reportedly going as a result of the move.
The Credit Suisse commodities climb down comes as something of a surprise. Because, as Neil Hume – commodities correspondent of the Financial Times pointed out earlier – it was only in May that Credit Suisse was trumpeting its commitment to commodities and intention to hang in there. “We remain committed to commodities,” Paul Hawkins, global head of commodities at Credit Suisse, told Bloomberg. “We also think that, as some players pull back in the space, there are strategic opportunities for the bank.”
Hawkins will be staying to oversee the dismissal/reallocation of his staff according to Financial News. Did he know what was coming two months ago? Maybe not. But that just goes to show how little visibility even the most senior bankers have. If the global head of a business doesn’t know what’s coming, how much can you trust the promises of your line manager?