Big job cuts at the bank Credit Suisse

On 21 October 2015, Credit Suisse announced a new strategy to grow its business and streamline its costs. The CEO Tidjane Thiam, who was brought in from outside the company earlier this year, unveiled the Board’s plan to focus on managing the wealth of well-heeled entrepreneurs in emerging markets such as China, and grow its universal banking business in Switzerland. Changes to the investment banking business aim to significantly reduce the amount of capital required to support it.

• Credit Suisse’s new CEO’s early life and career (Le News 10.03.15)

Annual fixed cost savings of CHF 3.5 billion are forecast by 2018. Some of these savings will come from job cuts. RTS, Switzerland’s national broadcaster, reported that 1,600 jobs were expected to go in Switzerland. In an interview on TV5 Monde, Tidjane Thiam said while the decision to reduce staff numbers was not taken lightly, it is an essential part of the new strategy.

Fund raising, to boost capital and cover CHF 1.5 billion of investments over the next three years, will include a CHF 1.35 billion private placement and a CHF 4.7 billion rights issue. In addition, a partial IPO of Credit Suisse (Schweiz) AG is planned by 2017.

Switzerland’s second largest bank announced weak third quarter profits of CHF 779 million, 24% lower than the same quarter last year. At the same time funds under management shrank by just over 5% to CHF 1,294 billion over the 12 months to 30 September 2015.

More on this:
Credit Suisse press release (21.10.15 – in English)
CEO’s presentation (21.10.15 – in English)
Q3 2015 earnings release (21.10.15 – in English)

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