Klein, who was on Credit Suisse’s board of directors until late last year, has also been appointed CEO of Banking and CEO of the Americas, in addition to being CEO designate of First Boston.
“This is a very fair price,” Credit Suisse CEO Ulrich Koerner said in an interview on Feb 9. “This is 100% the right deal at the right price, and there is no conflict of interest.”
Credit Suisse said that it paid a single-digit price-to-earnings multiple for the business and it is expected to be earnings-accretive and have little impact on capital ratios.
The Swiss bank already faced questions when Klein, a member of the board committee that decided to carve out CS First Boston, was appointed to run it. The firm’s chairman has said Klein abstained from some votes on the topic.
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The new investment bank is set to be a partnership model, with key employees having a level of ownership. Credit Suisse plans to maintain a majority stake initially, but reduce its holding at a later stage. It has already secured a commitment from an unnamed investor for a US$500 million injection into the business, and is holding discussions with other parties for equity stakes, capital injections or balance sheet partnerships. Bank executives have already said several parties are interested in investing in First Boston.
