Credit Suisse's new investment bank head has a long past

Jim Amine is out at Credit Suisse. After a miserable third quarter and an uninspiring first nine months of the year, in which the Swiss bank's investment banking and capital markets made a loss of CHF102m, Credit Suisse seems to have decided that it needs someone new. That new someone is an old face, with a big history.

David Miller, the new head of investment banking and capital markets at Credit Suisse, has been at Credit Suisse over five times as long as CEO Tidjane Thiam. While Thiam arrived only in 2015, Miller joined in 1997 and has worked under a succession of Thiam's predecessors including Lukas Mühlemann, John Mack and Brady Dougan.  Mühlemann, Mack and Dougan are long gone; Miller is not only still around, but thriving.

This wasn't always a given. Writing for the New York Times in 2016, Willian D. Cohan, the former JPMorgan managing director-turned journalist, noted that as the co-head of capital markets in Credit Suisse's syndicated loan group back in 2004, Miller was the architect of something called the 'dividend recapitalization loan.' This allowed real estate developers on the West Coast of the United States to borrow based on what turned out to be a highly inflated valuation of their projects. In 2014 Highland Fund Management won a $40m case against Credit Suisse after the bank was found liable for fraud following a three-week trial in Dallas. At the trial, Claymore Holdings, a Highland-affiliate, said that it believed that Miller himself had devised the valuation methodology that artificially inflated the value of its contested development at Lake Las Vegas.  

Credit Suisse stood by Miller, who earned $23.1m between 2004 and 2008 (including $7.2m in 2006 alone). Two years later, in 2016, Miller was promoted along with Brian Chin as joint head of Credit Suisse's credit division. Cohan questioned the wisdom of this at the time in light of comments made by Miller in relation to Lake Las Vegas such as, “I go wherever I can find a fee,” and Miller's suggestion that he was comforted by colleagues' willingness “to work in the deep dredges of life with me.”

Cohan has yet to write on Miller's new role as head of the entire investment bank and capital markets group, but presumably he would not be entirely approving. Credit Suisse declined to comment for this article. However, 13 years after the last dividend recapitalization loan, it might be supposed that Miller has had an opportunity for rehabilitation. 

If Miller can now turn Credit Suisse's investment banking and capital markets unit around, his rehabilitation will be complete. However, it's a process that might be harder than it seems. Amine, who took on the same role in 2015, also promised to revamp the division and to get the bank a top-five position for investment banking in EMEA. This was followed by some wild hiring in 2016, when Credit Suisse added 25 managing directors across EMEA and the U.S.. However, in the first nine months of 2019, Credit Suisse's share of M&A fees was just 3.8% globally and 3.1% in EMEA. Throwing bodies at the issue doesn't seem to work.

It's no longer Amine's problem. While Miller has now been handed the CS problem child, Amine himself is off to run Credit Suisse's private credit unit in New York under Eric Varvel, head of asset management. Private credit is a growth business and an area that banks like Morgan Stanley are also chasing. By comparison, revenues in Credit Suisse's investment banking and capital markets business fell nearly 30% in the first nine months of this year. With the end of the year approaching, Miller's first task in his new role may not be finding a fee but appraising how many of Amine's new MDs he can afford to keep before bonuses are paid. 

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