Credit Suisse loses top dealmaker to Citigroup

Credit Suisse has lost one of its oldest remaining dealmakers to Citigroup as the ailing Swiss lender prepares for a sweeping restructuring of its investment bank following a series of scandals.

Jens Welter is leaving Credit Suisse less than nine months after being appointed co-head of global banking, ending a 27-year career at the Swiss bank where he rose to prominence as a top advisor to consumer goods companies such as Nestlé.

Welter will join Citi as the new co-head of European investment banking and also chair of the consumer and retail advisory business, which works with the largest companies in these sectors worldwide. He will jointly lead Citi’s operations in Europe, the Middle East and Africa with Spanish banker Ignacio Gutiérrez-Orrantia.

“Jens is one of the best consumer bankers around. We spoke at length,” said Manolo Falco, global co-head of investment banking at Citi. “We really wanted to fit that right. We don’t usually do that.”

Gutiérrez-Orrantia said, “Jens and I totally agree on the ambition and growth potential for the franchise and what it takes to be successful.”

Falco said Citi wants to capitalize on the market downturn to hire experienced bankers in Europe. The US bank recently hired veteran Deutsche Bank dealmaker Patrick Frowein and JPMorgan Chase banker Barry Weir for senior roles in its European advisory business.

Citi has also added senior dealmakers to its consumer and retail advisory business, including Goldman Sachs banker Chuck Adams last year.

In contrast, Credit Suisse has seen a string of executive departures from its investment bank over the past two years as a series of scandals have hit the group’s share price and prompted executives to accept bids from rivals. After three months of garden leave, Welter will switch to Citi.

New CEO Ulrich Körner, who was installed by chairman Axel Lehmann in the summer, is planning a major restructuring of the 166-year-old lender that will see the investment bank scaled back and thousands of jobs cut.

The latest plans under consideration, which will be revealed by the bank’s third-quarter results on October 27, include splitting the investment bank into three parts and reviving a “bad bank” holding company for high-risk assets and Companies for sale, the Financial Times reported last week.

Credit Suisse board members recently proposed offering senior managers stakes in the investment bank to retain employees. The idea was widely seen as heralding a future spin-off of the bank’s advisory business, although people familiar with the matter said it was not an immediate priority.

Credit Suisse shares hit an all-time low below CHF 4 on Tuesday after falling 17 percent over the past week on market fears the bank was preparing a capital increase. Shares are down more than 56 percent this year.

Trying to calm staff nerves after recent speculation about their plans for the company, Körner and Lehmann sent a group-wide email last week.

“We want to show the bank a clear path that will strengthen our business in the long term. This process requires time and significant effort from many parts of the organization,” they wrote.