Credit Suisse plans to cut around 5,000 jobs – source

Credit Suisse plans to cut around 5,000 jobs - source
Written by admin

A logo is pictured on the Credit Suisse bank in Geneva, Switzerland, on June 9, 2022. REUTERS/Denis Balibouse

Register now for FREE unlimited access to

ZURICH, September 2 (Reuters) – Credit Suisse (CSGN.S) A source with direct knowledge of the matter told Reuters that it is considering laying off about 5,000 jobs, including about one in 10, as part of a cost-cutting move at Switzerland’s second-largest bank.

The extent of possible layoffs underscores the challenge facing new CEO Ulrich Koerner as he seeks to rebalance the bank after Credit Suisse and a series of scandals.

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

Register now for FREE unlimited access to

Credit Suisse has described 2022 as a “transition” year with a change of guard, restructuring to reduce risk-taking in investment banking, and boosting wealth management.

The Zurich-based bank dismissed speculation that the bank could be bought out or broken up.

The source said that discussions about the layoffs are ongoing and the number of cuts is still subject to change. Swiss newspaper Blick previously reported that more than 3,000 jobs would be laid off.

Credit Suisse said it will cut costs below 15.5 billion Swiss francs ($15.8 billion) in the medium term, and to 16.8 billion francs per year this year.

So far, he has not outlined the layoffs.

Promoted to CEO a little over a month ago, Koerner was tasked with repurchasing investment banking and cutting more than $1 billion in costs to help the bank survive a series of setbacks and scandals.

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

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

“Reducing costs is the easiest step he can take. But it’s not a strategy,” said Vontobel analyst Andreas Venditti. “You can get into a vicious circle where business is cut off, services drop, and customers leave.”

Venditti highlighted another conundrum: “The bank may also need to raise more capital if restructuring costs, including business cuts, reach billions.”

Analysts at Deutsche Bank estimate that it may need to raise capital by as much as 4 billion Swiss francs to support its bumpers and finance the renovation.

Koerner, 59, a restructuring expert, replaced Thomas Gottstein as CEO in August after two turbulent years punctuated by huge losses, a rare court conviction for the Swiss bank, and a 40% drop in its shares.

Between April and June, the bank posted a loss of 1.59 billion Swiss francs due to rising legal costs. The investment bank alone lost CHF 1.12 billion before tax.

The twin hits – the $5.5 billion loss due to the default of US family office Archegos Capital Management and the closing of the $10 billion supply chain financing fund linked to the collapsing British financier Greensill – also swept the bank.

In June, Credit Suisse was also found guilty of failing to prevent money laundering by a Bulgarian cocaine trafficking ring in the first criminal case against one of Switzerland’s leading banks. He is appealing the conviction.

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

The bank aims to begin offering wealth management services in China next year by securing full ownership of the local securities venture.

($1 = 0.9825 Swiss Francs)

Register now for FREE unlimited access to

The report by Oliver Hirt was written by Michael Shields; Editing by Elisa Martinuzzi, John O’Donnell, Alexander Smith and Jane Merriman

Our standards: Thomson Reuters Trust Principles.

About the author


Leave a Comment