In July last year, Credit Suisse Chairman Axel Lehmann denied any intention to merge or sell the beleaguered bank after it reported its third straight quarterly loss. The lender had lost more money in three quarters than it made in the whole of 2019.

Share Market Live

NSE

Eight months later, the bank found itself at the doorstep of Swiss regulators, resulting in an overnight, hastily arranged takeover by a crosstown rival, UBS.

Credit Suisse was one of the few lenders who did not accept a bailout during the global financial crisis of 2008. On the other hand, UBS did as it was on the verge of a collapse. A decade-and-a-half later, the tables have turned, with UBS taking over Credit Suisse.

Spying, drug offences, collapse of some major clients, and the first major Swiss bank to undergo a criminal trial - there is nothing Credit Suisse has not been a part of over the last few years.

A fallout of the slew of scandals meant a complete erosion of its market value. The crisis at Credit Suisse is not remotely connected to the banking crisis across the Atlantic.

The crisis goes back to January 2019, when then-CEO Tidjane Thiam and Iqbal Khan, who ran the wealth management business nearly came to blows at a dinner party. Khan festered ambitions of leading the bank someday, but was overlooked for promotion a few weeks after this incident.

Hurt, Khan quit and took up a job with rivals UBS. Fearing that he may poach key personnel, a private security firm was hired to keep tabs on his movements but Khan discovered the same, leading to a physical brawl.

Thiam also quit in 2020 and was replaced by Thomas Gottstein. Within two months of him taking over, the bank witnessed the collapse of supply-chain finance business Greensill in March, and a $20 billion blowup of Bill Hwang's hedge fund Archegos Capital. The bank took a $4.5 billion charge as a fallout of this. In further embarrassment to the lender, chairman Antonio Horta-Osorio quit after he violated Covid-19 protocols.

The Russia-Ukraine war early last year resulted in further setback for the bank, and led to the sacking of Gottstein's tenure as CEO.

Much before the current crisis, Credit Suisse received a lot of flak for arranging loans worth $1.3 billion between 2012 - 2016 to develop the Tuna fishing industry in Mozambique. However, the loan was kept a secret from the country's parliament, the IMF, and never reached Mozambique. It was laundered through an account in Abu Dhabi and reached politicians, contractors and bankers.

At the turn of the century, another bank employee was convicted of assisting a drug racket of laundering 16 million Swiss Francs and transactions worth 140 million Swiss Francs.

Credit Suisse reported a $1.7 billion loss in 2021, nearly $7 billion in 2022 and projected another substantial loss in 2023, before turning profitable next year. Its fate now lies in the hands of UBS, as Switzerland's second-largest bank was left with no credit or credibility after a 166-year history!