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Credit Suisse to slash 9000 jobs on £3.5 billion quarterly loss

Credit Suisse to slash 9000 jobs on £3.5 billion quarterly loss

Scandal-stricken lender Credit Suisse is to slash 9000 jobs and hive off its investment banking unit after posting a £3.5 billion loss in its third quarter.

The Swiss bank plans to raise 4 billion Swiss francs in a bid to strengthen its balance sheet and steady the ship after being rocked by a string of pooor managment decisions linked to the collapse of Archegos Capital and Greensill Capital last year.

In October last year, the bank was branded the 'master of kickbacks' after being hit with a £147 million penalty by the Financial Conduct Authority, as part of a $475 million global resolution agreement, for serious financial crime due diligence failings related to loans worth over $1.3 billion, which the bank arranged for the Republic of Mozambique.

In Freburary, it called in outside experts to help find the source of a leak that exposed the details of accounts held by wealthy clients allegedely involved in torture, drug trafficking, money laundering, and corruption.

The latest overhaul marks the third attempt by successive chiefs to reverse its declining fortunes over recent years.

A headcount reduction of 2,700 employees, or five of the group's workforce, is already under way in the fourth quarter. By the end of 2025, the bank expects to have around 43,000 full-time-equivalent staff, down from around 52,000 at the end of September, using natural attrition and targeted job cuts.

It is also spinning off its investment banking business into a new unit rebranded as CS First Boston, which will be "more global and broader than boutiques, but more focused than bulge bracket players". The spin off will be funded by outside investors while retaining a client relationship with the Swiss bank.

The capital raise at Credit Suisse has already begun via an issue of new shares to investors, including Saudi National Bank, which plans to invest up to 1.5 billion francs for a stake of up to 9.9%.

The lender says it wants to reduce its cost base by 15%, or around 2.5 billion francs, to reach around 14.5 billion in 2025.

Comments: (1)

Michael Rada
Michael Rada - IBCSD LAB s.r.o, - Praha 28 October, 2022, 08:32Be the first to give this comment the thumbs up 0 likes

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