God of Corporate Hunting - Chapter 214



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◈ Episode 214 Credit Suisse (2)

Credit Suisse is a historic bank founded in the 1850s and is one of the world’s leading investment banks.

In the 19th century, it grew through the issuance of bonds for the European electrical grid and railway system.

It has grown rapidly while successfully avoiding the financial crisis, and currently has assets of approximately 500 billion Swiss francs (approximately 750 trillion won), assets under management of approximately 1,700 trillion won, and 100,000 employees scattered around the world.

But God again did not give this bank any luck.

A few years ago, the Archegos incident, which shook the global financial world due to excessive leverage, resulted in a loss of more than $5 billion, and a whopping $3 billion was lost due to a loan from Greensill Capital involving a former British Prime Minister.

The two investment failures rocked Credit Suisse.

The collapse of Silicon Valley Bank, which struck while the company was in a weak state, dealt a fatal blow to Credit Suisse. Investors who had previously doubted the soundness of the bank turned away, and Credit Suisse also virtually went bankrupt.

“Credit Suisse?”

Nam Yun-myeong asked again as if he had misheard.

Credit Suisse was too big a company for Korea Asset Management or Mega Asset Management to weigh.

“Yes, that’s right. Credit Suisse.”

Yoon Se-bin said with shining eyes.

Nam Woon-myung read confidence in her eyes. At times like this, she shines so beautifully that it is difficult to express. The ability added to her natural appearance exudes the aura of a goddess who looks down on the world with elegance.

“At that time, when we acquired Silicon Valley Capital, the Swiss National Bank injected 70 trillion won in emergency funds to quell the situation, right?”

“Yes. Later, UBS (Union Bank of Switzerland), the number one bank in Switzerland, decided to acquire it for 4.2 trillion won.”

“It ended like that……”

“It gets a bit complicated.”

The Swiss government intervened to speed up the process when the financial crisis occurred. In the process, procedural problems accompanied by illegality arose. Swiss prosecutors launched a multifaceted investigation into whether the financial authorities had conducted appropriate supervisory activities during the Credit Suisse crisis, whether the acquisition price was appropriate, and whether there were any other alternatives.

“It is a global trend that financial companies are becoming larger, but if UBS merges with Credit Suisse, its assets will exceed 200 trillion won. An excessive size, especially one that increases bad debts, could easily push the entire financial system into a bigger crisis.”

The fact that Credit Suisse’s assets are worth 750 trillion won, but the acquisition value is only 4 trillion won, reflects its insolvency.

“So the Swiss financial authorities are also feeling the pressure. There is considerable opposition to the merger. In particular, Saudi Arabia’s National Bank, the previous largest shareholder of Credit Suisse, refused to support it. This has made opposition even stronger.”

The National Bank of Saudi Arabia had invested $1.5 billion to own a 9.9% stake in Credit Suisse. It lost 80% of its investment in the debacle.

“I think UBS is looking for a new investor to take over Credit Suisse.”

“That… wouldn’t be an easy decision to make, would it?”

In the case of investments in such insolvent banks, the hidden insolvency is a bigger problem than the apparent insolvency. That is why major global investors are reluctant to invest.

If you’re not careful, you could lose all your investment.

“But if we think back to the IMF era in our country… the foreign funds that acquired banks at dirt-cheap prices made huge profits and got out.”

Opportunity coexists in crisis.

If Credit Suisse had less hidden bad debt, it would be a great investment. But does Korea Asset Management have the ability to analyze that fact? And even if they acquire it, do they have the ability to lead that huge bank?

Nam Woon-myung was astonished at Yoon Se-bin’s bold bet.

Where exactly is Yoon Se-bin’s fate pointing now?

Nam Yunming resisted the temptation to look into her fate. Unlike other people, he was strangely unable to do anything like looking into her future.

“You will help me, right?”

Yoon Se-bin actively asked for help.

Has she ever needed him so desperately?

Nam Yun-myeong nodded without realizing it.

“Instead, you must support my plan to invest in the North Star Group.”

“of course.”

It was decided to go to Switzerland right away.

* * *

Zurich, Switzerland is one of the world’s most livable cities.

Nam Yun-myeong got off at Zurich International Airport and took the subway to the city center in about 10 minutes.

Next to him stood Yoon Se-bin and Jo Ha-neul. On this business trip, instead of just her and him as usual, his secretary Jo Ha-neul was by his side.

Nam Woon-myung shared his first impressions after looking around the downtown area.

“It’s sharp.”

There were spires symbolizing churches scattered all over the city. That alone made me realize that I was in Europe.

If you come to Switzerland, a country of tourism and finance, you should feel like you are on vacation, but Yoon Se-bin’s face was stiff the whole time. That means he feels burdened by the battle ahead.

Jo Ha-neul, who was watching her, stretched and said.

“If things go well, we’ll go play in the Alps and then go back!”

“Yeah.”

Nam Woon-myung also agreed. You can’t just work and live forever.

However, Yoon Se-bin didn’t show any particular reaction.

They unpacked at a hotel near the UBS headquarters.

HY Emerald Hotel. I was glad to see that the hotel had finally made it to this area.

Since they had a lot of work to do, they got a spacious suite like before, and one section was used by Yoon Se-bin and Jo Ha-neul, and the other section was used by Nam Woon-myung.

I spent my busy time arranging related documents on the table and reviewing the materials on my laptop.

Yoon Se-bin frequently called Kim Seon-jin in Korea and utilized the manpower of Korea Investment & Securities. Next to him, Jo Ha-neul was busy organizing documents and helping with the analysis.

In particular, Nam Woon-myung was concerned about the current UBS management.

Ultimately, whether Credit Suisse can be acquired depends on the will of UBS management.

He posted photos of UBS CEO Rene Sain and Inder Child CFO and analyzed their personalities and fortunes.

Combining the current circumstances and the CEO’s personality will inevitably lead to an appropriate countermeasure.

“Our vision is important.”

Nam Yun-myeong pointed out the key point.

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“Vision?”

He explained further to Yoon Se-bin, who was tilting his head.

“It is important to analyze the current financial situation and determine the appropriate value, but to attract them, you have to mention the future rather than the price. In other words, you have to have a firm standard for how to handle the inevitable accompanying restructuring and how to clean up the arrogantly managed IB division. Credit Suisse currently has branches in 50 countries around the world, so…….”

“aha!”

Yoon Se-bin seemed to have caught the mood.

She is a wise woman, so she will prepare appropriately.

Nam Woon-myeong asked the two people who were working frantically.

“Do you need anything? Maybe a drink?”

“Should I just have it delivered?”

“I’ll be back.”

Nam Yunming ordered some necessities and drinks and then left the room.

As I was coming down to the lobby and about to go out onto the street, I saw a middle-aged man sitting on the sofa talking intently on his phone.

“I think it’s a failure. They won’t give us any investment advice. What do they want us to do?”

As I was clicking my tongue at the thoughtless middle-aged man screaming into his cell phone, I heard the word Credit Suisse.

Nam Woon-myung stopped walking without realizing it and overheard the phone call.

The middle-aged man, who had just finished talking absentmindedly, looked back at Nam Yun-myeong.

“what?”

“yes?”

“Why are you eavesdropping on other people’s phone conversations?”

“Oh! Sorry. I just happened to hear about Credit Suisse…….”

Nam Yun-myeong apologized politely.

A middle-aged man glanced at him and asked.

“chinese?”

“No, I’m Korean.”

“Aha! You guys also came to Credit Suisse to borrow money?”

“yes?”

There seemed to be a slight misunderstanding, so I tried to correct it, and the middle-aged man took out his business card.

“This is the kind of person I am.”

Birkenstock Capital CEO Jürken Bauer.

It was the first time I heard of the company name, and it seemed to be a small German venture capital firm.

Birkenstock Capital was looking for a promising investment and decided to inject funds from Credit Suisse. The problem was that Credit Suisse, which was in the midst of a liquidity crisis, was shaken, and Birkenstock Capital was suddenly struck by lightning.

After Credit Suisse was acquired by UBS, they asked for investment again, but Credit Suisse, busy with the merger with UBS, simply responded by telling them to stop all lending and wait.

As a result, Birkenstock Capital also stopped related work.

It was a problem of small and medium-sized capitals that were dependent on large banks.

Nam Woon-myeong also handed over his business card.

“Hmm, Mega Asset Management?”

Bauer glanced at him. He glanced at the operator, whose name he had never heard of, and gave him a quick glance at his age and title before chuckling.

“Did you come all the way here from Korea to get a loan?”

“That’s not it……”

“We came all this way and it didn’t work out. As you know, UBS and Credit Suisse are in chaos right now… and work is almost at a standstill. It would be quicker to give up. If it were me, I would have just handled it myself in Korea. Why did you come all this way in vain?”

“But when it’s necessary…….”

“That’s enough! You wouldn’t even deal with regular customers like us, so why would you deal with a small Korean financial company? Even if you did, it would take a long time, I guess. I guess I’ll have to go back and come back later depending on the situation. I’m advising you that you don’t want to waste time either, so it would be best for you to go back now.”

Bauer, who had been talking nonsense in a confused state, turned his back.

‘That’s right.’

Nam Yunming couldn’t bear to answer her directly, so he quietly turned away. What did it matter anyway?

Nam Woon-myung took to the streets, understanding that they must have been out of their minds due to the suspension of lending, either because they were ignoring Korea or because they were ignoring Mega Asset Management.

A convenience store appeared on one side.

* * *

The interview with UBS went surprisingly easily.

The fact that UBS gave its time to the internationally little-known Korea Asset Management consortium shows how urgent the situation is.

In the conference room of the UBS headquarters building, Nam Woon-myung met with UBS’s key board members along with Yoon Se-bin and Jo Ha-neul.

The negotiations were led by CEO Rene Sain and Inder Child CFO, whom he had analyzed diligently.

Their fates when they met in person were not much different from those seen in photographs.

But this time, there was a problem: these people were UBS executives and had nothing to do with the future of Credit Suisse.

“As you know, we are struggling both internally and externally. The prosecution is saying that they will closely investigate the Credit Suisse acquisition process, and public opinion is not very favorable. Many people are also unfavorable about the birth of a giant bank by merging two banks. Then, the proposal from Korea Asset Management was like a drop of rain in a drought.”

The newcomer revealed his honest feelings.

Usually, I try to hide my urgency, but this time, my strategy was completely different.

“Actually, other aspects are irrelevant. The only issue is whether they have the ability to properly manage Credit Suisse after acquiring it. Mr. Yoon Se-bin, the representative of the consortium…….”

“Yes, I will.”

Yoon Se-bin answered.

“You’re still young. Your resume is… You started out as a private equity fund Blackstone, worked in the investment business at Korea Bank, then became independent and founded Korea Asset Management. You’re currently the CEO of Korea Asset Management and a registered director at Korea Investment & Securities. Your career is quite diverse for your age. And you even acquired Silicon Valley Capital… It’s clear that your resume is suitable for Credit Suisse, an IB.”

The newcomer started off with a positive review.

“But… can you really manage a big bank? I’m sorry, but you still have little experience and are young. This job requires you to manage 100,000 employees and handle 500 billion Swiss francs. If you don’t prove your ability, it will be difficult. Trust is the top priority in a bank.”

The newcomer’s negative remarks continued.

The sea as expected.

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