Oliver Hirt and Pamela Barbaglia by John O’Donnell

ZURICH/FRANKFURT – Credit Suisse (SIX: ) A new centralised structure will be unveiled on Thursday by the bank in an effort to bring all its divisions under control and end a series of scandals that cost the Swiss bank billions, according to two sources.

Credit Suisse has been penalized for making a false loan to Mozambique over the last year. This was tainted by its association with Greensill. The company also suffered losses of $5.5 Billion when Archegos family office collapsed. Credit Suisse regulators have also been accused of spying on senior executives.

Credit Suisse brought in Antonio Horta Osorio, a seasoned banker to the chair in April. He will present his plan to reform Switzerland’s second-biggest Bank on Thursday as it reports third quarter results.

According to two sources familiar with this matter, one major change will be to create a single division for wealth management that caters exclusively to a global elite. It would centralize oversight at Zurich bank’s headquarters.

The current structure, which was established six years ago, allows wealth management to cross three divisions. One is a Swiss company, one an Asia-Pacific unit catering mostly to wealthy Chinese, and another international branch based in Switzerland.

Credit Suisse would be able to merge the wealth division, which could simplify the process and allow for possible cost reductions.

According to sources, it will also curb local bankers, who enjoy a lot of autonomy. It will force them closer to senior management, who were often blindsided by past scandals.

One source told Reuters the person said that the bank’s top managers had grown very fearful and didn’t want to let local bankers make as much money.

Credit Suisse’s spokesperson declined to comment.

SHARES SUFFER

Credit Suisse’s financial misery is stark in contrast to UBS, its rival cross-town.

UBS, which suffered massive losses during the financial crisis and received a bailout from the government, successfully switched to wealth management. Today it is the most successful wealth manager in the world with $3.2 Trillion of assets.

The shares of Credit Suisse have declined 53% in 10 years, while its has risen 57% over that time.

Credit Suisse’s shares fell this year due to a string of poor headlines. Its shares are down 12% while UBS is up 36% while Wall Street rivals are riding high on the back of a boom in equity trading and M&A.

Andreas Venditti is an analyst from Swiss private bank Vontobel. He stated that it will take more than minor changes and a new divisional setup at Credit Suisse in order to reverse this trend.

Credit Suisse is expected to undergo a major overhaul, which has prompted high-profile dealmakers and others to contact the bank’s top management in order to propose merging with another competitor.

But, despite the fact that these ideas have been rejected thus far, they were still said by the person.

According to sources, managers are still concerned about the potential for investors demanding that the bank be liquidated or that the bank’s declining market value means it is a possible target for hostile foreign takeovers.

“WARNING SIGNALS”

Credit Suisse, which has a $28 billion market value, is less valuable than UBS. Credit Suisse also weighs in at half the trillion dollar mark compared to Wall Street giants like JPMorgan (NYSE:).

The United States’ approach to Switzerland would be a disaster. Washington pressured Swiss banks into giving up the strict secrecy codes they had in place a decade earlier, damaging relations between them.

Credit Suisse/UBS, which was touted as an alternative alliance would have its problems. One, it would control the Swiss market.

A source claimed that Credit Suisse had considered selling or spinning off its asset management business. But that was stalled. However, the source said that once more efforts are made to reduce costs and increase growth, it is possible for the company’s sale or listing on the stock exchange to be reintroduced.

This bank is using lessons learned from Archegos and other recent failures to help them centralize their operations.

Credit Suisse had published earlier in the year a report that blamed a bank’s failure to avoid catastrophe on Archegos’ focus on short-term profits.

Credit Suisse’s senior management seemed to be unaware of the risk it was taking despite long-running discussions with Archegos, the largest client for hedge funds at the bank.

Both the chief risk officer of the bank and the head the investment bank remember hearing it only on the morning of the fund’s demise.

According to the report, “There were several warning signs.” “Yet, the business failed to listen to these warning signals.”

($1 = 0.9127 Swiss francs)