Publications
- Credit Suisse's chief financial officer Dixit Joshi has been at the centre of efforts to keep the bank from collapsing.
- He was born in South Africa and started his career at Standard Merchant Bank.
- Mark Barnes, who first appointed him, said his capabilities were evident from the start.
- For more financial news, go to the News24 Business front page.
As the 166-year-old Credit Suisse came close to collapse over the past week, its South African-born chief financial officer Dixit Joshi played a pivotal role in trying to save the bank.
The 51-year-old was appointed as chief financial officer at the Swiss bank in October last year, just as Credit Suisse bank faced a huge confidence crisis, which pushed its share price to (then) record lows.
According to the Financial Times, he told his colleagues at his first executive team meeting in Zurich: "You forgot to send me flowers — all I got were these gifts from the market. So much for my honeymoon period!"
Credit Suisse has been bleeding billions following the collapse of the UK lender Greensill Capital and the US investment firm Archegos Capital over recent years. It has also been forced to pay massive fines following its involvement in scandals like the disastrous "tuna bonds" in Mozambique, which financially crippled that country, as well as money laundering relating to a Bulgarian drugs ring.
Last month, the bank reported a loss of 7.3 billion Swiss francs (R146 billion) and confirmed that clients have been withdrawing money. It later also reported "material weaknesses" in internal controls over financial reporting.
Then came the collapse of Silicon Valley Bank, and confirmation from Credit Suisse's large investor Saudi National Bank that it won't give the bank any more money.
Depositors started to withdraw money in earnest, and its share price crashed 30% on Wednesday, 15 March.
In the run-up to the selloff, teams reporting to Joshi were tasked with drawing up scenarios that could save Credit Suisse, Reuters reported.
But when the crash happened on 15 March, Bloomberg reported that Joshi "determined it was time to put a stop to the frenzy" – and then agreed with fellow executives to get a letter of support from the Swiss regulators and central bank, along with a plan to buy back $3 billion of bonds.
"They seemed to get their wish and more," Bloomberg wrote. The bank and regulators not only confirmed that Credit Suisse was healthy and could borrow state money – but the Swiss authorities then also turned to UBS, asking it to buy Credit Suisse.
"It was less of an ask than a demand, as it turns out. The only other option was nationalisation," reported Bloomberg.
UBS will buy Credit Suisse for less than R60 billion – compared to its market value of around R150 billion on last Friday.
Joshi's SA background
It's not clear where the takeover will leave Joshi, who was born in Durban and grew up in Laudium outside Pretoria.
His great-grandfather was a friend of Mahatma Gandhi, who encouraged Joshi's great-grandfather to come to South Africa from Gujarat in India in 1904, according to a Finweek profile.
After graduating with an actuarial degree from the University of Witwatersrand in 1992, Joshi applied for a job at Standard Bank. "I'd missed the deadline for the applications, and I phoned them up. They told me not to bother, as I was late. But I insisted on faxing the application through. I didn't mind if they tore it up but I wanted to know I'd at least done it," he told Finweek in 2010.
The same night, Mark Barnes, who was with Standard Merchant Bank at the time, called him and invited him for an interview. But Joshi wasn't sure whether he wanted to work in investment banking. Barnes told him to call back when he's ready – which Joshi did, six months later.
Barnes then appointed Joshi to his team, saying that from this start, his capabilities were clear.
"Dixit was wide-eyed and enthusiastic," Barnes told News24 this week. "But unlike many others, his enthusiasm didn't trip him up – he took a measured, analytical approach to everything he did."
It was also clear that he was willing to learn and do the hard work, not race ahead and be over-confident in his own views, said Barnes. He wouldn’t make a "performance" out of his analysis, but his capabilities were evident.
The '90s were an exciting time to be in investment banking in South Africa, as new markets and deal-making opportunities opened up. Barnes said that Joshi flourished at Standard Merchant Bank, where there was a wide range of young people from different backgrounds who later went on to excel in other companies. Barnes later founded the JSE-listed Purple Group and was CEO of the Post Office from 2014 to 2019.
In the mid-1990s, Joshi moved to Credit Suisse First Boston in the UK, and from there he joined Barclays Capital, where he became head of equity derivatives in 2003 and – at the height of the financial crisis – head of equities in Europe, the Middle East and Africa.
Jerry del Missier, who was co-chief executive of Barclays' corporate and investment bank and worked with Joshi, told the Financial Times that despite huge surges in market volatility at the time, "[Joshi] was always mature and calm when dealing with that and capable of grasping the complexity".
Pretty button-down guy
In 2011, Joshi moved to Deutsche Bank, where he became group treasurer six years later - just after the group was hit by a $14-billion fine for misselling mortgage securities in the US. This triggered large losses for a number of years and a loss of confidence in the bank.
"He’s battle-hardened from his time at Deutsche Bank, and that's what Credit Suisse needs right now," British financier Huw van Steenis told the Financial Times last year. He has known Joshi for more than two decades.
Van Steenis added:
According to Del Missier, Joshi is "a pretty button-down guy". "He’s not the sort to be jumping up and down on tables at La Voile Rouge in Saint-Tropez."
His family still lives in South Africa and he and his Indian-born wife have brought their three daughters here on holiday, Finweek reported.
Joshi is also a trustee of South Africa's Student Sponsorship Programme, a nonprofit organisation that has provided scholarships to 1 500 South Africans from poor communities to attend top high schools.
