Mixed Fortunes At CSFB

by Caroline Maxwell, Investors Offshore.com

04 June 2001

Credit Suisse First Boston, the investment banking arm of the financial services giant Credit Suisse Group is suffering a revenue slump as a result of weak stock market conditions, according to an internal memo from the company's CEO, Allen Wheat.

The memo dated 25th May stated that: 'In light of market conditions, there will be no 2001 mid-year salary increase for existing vice presidents, directors, or managing directors.' However, although some 5,400 of the top brass will be affected by this decision, Mr Wheat was quick to point out that employees below the vice president level will still be eligible for mid-year raises.

It's been a funny old year for CSFB, who with the help of Frank Quattrone, one of its chief underwriters, climbed over Morgan Stanley Dean Witter and Goldman Sachs to reach the top of the pile in underwriting technology IPOs in 1999/2000. Lauded by one and all as the new rising stars, CSFB now find themselves particularly hard hit by the stock market decline, and the ensuing dry-up of IPO underwriting revenues. This year alone the bank has been forced to cut about 500 jobs, including 150 investment bankers, in an effort to boost profit margins.

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