Credit Suisse’s Klein to lay out division plans at a New York meeting

Michael Klein, the new investment banking chief at Credit Suisse Group, is expected to lay out his plans for the division this coming week at a meeting in New York. During this meeting, Klein is also expected to address concerns about the spin-out’s funding and structure.

Credit Suisse’s Klein to lay out plans in Boston summit

According to Reuters, Klein will attend a meeting in New York to address the senior bankers at Credit Suisse. During the meeting, he will brief the company’s senior bankers about the efforts to raise capital for CS First Boston (CSFB).

Klein is also expected to provide a way forward regarding Credit Suisse’s activities that will go into the business and plans about an initial public offering (IPO) for the advisory firm that will be done at some stage.

One of the options that Klein and the senior bankers will deliberate on for CSFB is for the firm to house the equity research operations for the Swiss bank. CSFB is a firm that will feature advisory and deal-lending businesses. This consideration would allow the Swiss bank’s investment bankers to make pitches to clients, especially those related to IPOs.

Klein has a reputation for dealmaking. He will be merging his investment banking experience into the investment banking operations of Credit Suisse to see CSFB becoming a standalone business that he will manage from New York. According to statements released earlier this month, Klein is selling his firm to Credit Suisse for $175 million.

The CSFB spin-out is part of the efforts being made by the Zurich-based company to boost profitability after making heavy losses and being involved in major scandals. Credit Suisse will manage money for the wealthy division after the deal.

Concerns about Credit Suisse and CFSB deal

However, there are concerns about CFSB. One of these concerns involves the source of the capital needed to support lending for dealmaking and funding the business. The creation of this boutique advisory firm also comes at a time when merger deals and IPOs have been slowing down because of concerns about interest rate hikes by central banks.

There is also uncertainty about the future of this spin-out. The spin-out has inhibited the bank’s ability to control the loss of talent in recent years. Cathal Deasy, the regional co-head of investment banking & capital markets (IBCM) at Credit Suisse, quit and joined Barclays months after being promoted.

The former co-head of global equities at the Swiss bank also resigned to join the Royal Bank of Canada. Credit Suisse’s Asia operations have also been affected by several departures. Klein plans to recruit bankers and bring renowned dealmakers to CSFB as it readies for launch.

Earlier this month, Credit Suisse announced that many junior bankers would receive their annual bonus in three quarterly installments to make it challenging to flee the company.