Monday March 9, 01:03 PM
Credit Suisse chairman takes over at Swiss Re
ZURICH (AFP) - Peter Forstmoser, the chairman of the world's biggest reinsurer Swiss Re (Virt-X: RUKN.VX - news) , has resigned, the group said Monday, as part of a reorganisation that focuses on cutting risks in its giant investment portfolio.
Forstmoser will be replaced by the group's vice-chairman and chairman of Credit Suisse, Walter Kielholz, prompting in turn a management reshuffle at Switzerland's second largest bank.
The bank (TBHS - news) announced on Monday that Kielholz had stepped down in order to focus on his role at the reinsurer.
Hans-Ulrich Doerig, currently vice-chairman of the bank, has been nominated to replace Kielholz as chairman of Credit Suisse.
Switzerland's top financial institutions have seen radical management changes recently year after taking unprecedented losses due to the US subprime home loan crisis and ensuing global credit crunch.
Credit Suisse has also posted record losses, albeit on a smaller scale than its rival UBS (Virt-X: UBSN.VX - news) , which has replaced both its chief executive officer and chairman.
Swiss Re's chief executive Jacques Aigrain resigned in February when the group posted its biggest annual loss of 864 million Swiss francs for 2008 as earnings were hit by the global financial crisis.
Aigrain was widely blamed for having led the reinsurer into the risky world of investment banking after he was appointed in January 2006, leaving the company badly exposed.
Kielholz told a press conference that Swiss Re wants a "significant reduction of risks in the portfolio (in order) ... to protect the core business."
It also aimed to "develop the core business" of reinsurance, which, according to Kielholz, is "healthy and has a lot of growth potential."
In addition, the group is seeking to "ensure optimal capital management in order to satisfy increased demand from clients during this period of pronounced scarcity of financing in the global insurance sector."
Analysts did not rate the changes favourably.
Zuercher Kantonalbank said Swiss Re's major problems remain and the change at the top does not herald a new beginning.
Bank Wegelin analysts made the same point, saying: "A break with the past is unlikely" with the nomination.
Meanwhile, analysts were more positive about the reshuffle at Credit Suisse -- although its share price fell badly on the news.
"Kielholz's replacement as chairman is not the heavyweight outsider that we would ideally like but at least he is an experienced banker and knows Credit Suisse well," Bank Helvea analyst Peter Thorne said of Doerig.
Bank Vontobel analyst Teresa Nielsen noted that Doerig has headed the risk committee, a background that should prove of "great benefit in the current environment.
"We believe the change of chairman will happen smoothly and are highly positive on the choice of Hans-Ulrich Doerig to lead Credit Suisse," Nielsen said.
Investors reacted negatively to both changes, with Swiss Re shares down 1.54 percent to 12.18 Swiss francs at mid-day while Credit Suisse plunged 7.18 percent to Swiss 22.24 francs.
The overall market was down 0.15 percent.
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