Credit Suisse seeks to cut about 5,000 jobs: source

Credit Suisse seeks to cut about 5,000 jobs: source
Written by admin

A logo is displayed at Credit Suisse bank in Geneva, Switzerland, June 9, 2022. REUTERS/Denis Balibouse

Sign up now for FREE unlimited access to

ZURICH, September 2 (Reuters) – Credit Suisse (CSGN.S) is considering cutting around 5,000 jobs, roughly one in 10, as part of a cost-cutting drive at Switzerland’s second-largest bank, a source with direct knowledge of the matter told Reuters.

The scale of the potential job cuts underscores the challenge facing Credit Suisse and new chief executive Ulrich Koerner as he seeks to get the bank back on track after a series of scandals.

The bank declined to comment beyond repeating that it would provide an update on its strategy review with its third-quarter earnings, saying any report on results was speculative.

Sign up now for FREE unlimited access to

Credit Suisse has called 2022 a “transition” year with a changing of the guard, a restructuring to reduce risk-taking in investment banking and increase wealth management.

The Zurich-based bank has dismissed speculation that it could be bought or broken up.

Discussions about job cuts are ongoing and the number of cuts could still change, the source said. The Swiss newspaper Blick previously reported that more than 3,000 jobs would be cut.

Credit Suisse has already said it will cut costs below 15.5 billion Swiss francs ($15.8 billion) in the medium term, down from 16.8 billion annualized francs this year.

So far, he has not outlined job cuts.

Koerner, promoted to CEO just over a month ago, has been tasked with downsizing investment banking and cutting more than $1 billion in costs to help the bank recover from a series of setbacks and scandals.

His strategic review, the second in less than a year, will assess options for the bank, while reaffirming its commitment to serving wealthy customers.

The Swiss lender is under increasing pressure to turn around the business and improve its financial resilience.

“Cutting costs is the easiest immediate step you can take. But it’s not a strategy,” said Andreas Venditti, an analyst at Vontobel. “You can end up in a vicious cycle, where jobs are eliminated, service goes down, and customers leave.”

Venditti highlighted another conundrum: “If restructuring costs, including job cuts, add up to billions, the bank may also need to raise more capital.”

Deutsche Bank analysts estimate that it may need to raise capital by 4 billion Swiss francs to bolster its reserves and finance the renovation.

Koerner, 59, a restructuring expert, succeeded Thomas Gottstein as chief executive in August after two tumultuous years marked by huge losses, a rare conviction for the bank in Switzerland and a 40% drop in its shares.

Between April and June, the bank posted a loss of 1.59 billion Swiss francs, as legal costs mounted. His investment bank alone lost 1.12 billion Swiss francs before taxes.

Twin blows – a $5.5bn loss from the default of US family office Archegos Capital Management and the closure of $10bn of supply chain finance funds linked to collapsed British financier Greensill – have also harassed to the bank

In June, Credit Suisse was also convicted of failing to prevent money laundering by a Bulgarian cocaine gang in Switzerland’s first criminal trial against one of its major banks. The conviction is being appealed.

In a sign that Credit Suisse is expecting an improvement in its fortunes, a senior executive told Reuters it is still betting big on China and plans to launch a wealth business there next year. read more

The bank aims to start offering wealth management services in China next year thanks to the full ownership guarantee of its local securities firm.

($1 = 0.9825 Swiss francs)

Sign up now for FREE unlimited access to

Reporting by Oliver Hirt, written by Michael Shields; Edited by Elisa Martinuzzi, John O’Donnell, Alexander Smith, and Jane Merriman

Our standards: The Thomson Reuters Trust Principles.

About the author


Leave a Comment