Credit Suisse added to UK regulator’s watch list on risk concerns

The UK’s financial regulator has added Credit Suisse to a watch list over concerns it hasn’t sufficiently addressed risky culture as the lender struggles to draw a line under a series of scandals.

The Financial Conduct Authority told Credit Suisse last month it was adding the bank’s UK operations and international unit to a list of firms warranting close monitoring after the scandals, according to a person with knowledge of the matter. The regulator cited concern over its risk controls, governance and culture.

Officials have asked the firm’s top management to offer evidence of the steps it would take to make improvements going forward, said the person, who asked not to be identified discussing private matters.

“We do not comment on our discussions with regulators, nor would it be appropriate for us to do so,” Dominik von Arx, a spokesman for the bank, said in an emailed statement. “As we have summarised before, we are now well advanced in executing the plan to strengthen our businesses and our risk culture.”

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Bank of Ireland’s departing chief executive, Francesca McDonagh, who has been named as Credit Suisse’s new head of European operations, will take up her new role at the bank on October 1st.

The Financial Times reported the news earlier, citing a letter to the bank’s senior management from the regulator. Only 20 or so firms are typically on the list at any one point, the FT said.

The FCA declined to comment.

Over the past two years Credit Suisse has seen a $5.5 billion hit from Archegos, the collapse of partner Greensill Capital and a string of profit warnings that eroded investor confidence, weakened key businesses and prompted an exodus of talent.

As part of a push to cut costs after warning of a second-quarter loss, Bloomberg reported last week that Credit Suisse was considering job cuts. The reduction in headcount may come as the bank prepares an update to investors on risk, compliance, technology and wealth management on June 28th.