Credit Suisse will cut 2,000 jobs at its global markets business
Swiss bank Credit Suisse has announced that it will cut 2,000 jobs at its global markets business.
The latest cuts are in addition to the 4,000 job cuts that the Swiss banking giant announced last month and are part of the bank’s efforts to reduce annual costs by 800m Swiss francs a year.
Deutsche Bank’s finance chief said earlier this week that the first two months of 2016 were the worst start to a year for banks that he has seen in his banking career.
The Swiss bank’s chief executive Tidjane Thiam, who took over at Credit Suisse from British insurer Prudential last July, is five months into implementing his new strategy.
He raised around 6 billion francs in capital last year and is cutting back its volatile investment banking business while focusing on more stable wealth management.
The cuts include eliminating 2,000 jobs at its Global Markets business to better weather challenging market conditions.
The company blamed a “high and inflexible cost base” and “volatile market conditions”. The global markets business trades bonds and other financial products.
In a statement accompanying today’s announcement, the Swiss bank’s chief executive Tidjane Thiam described the performance of the global markets business as “disappointing”, blaming the company’s exposure to financial products that were difficult to trade in “challenging” market conditions.
“In this context, we have taken immediate action to reduce out sized positions in activities not consistent with our new strategy and systematically reduced our exposures,” he said.
The bank is leaving some business areas altogether, including distressed credit products.
Credit Suisse is investing in its equities (shares) business which it described as “a core area of focus for the bank”.
Credit Suisse expects to report a loss in the first quarter of 2016, due to a charge of $346m to cover the costs of the reorganisation.
On a brighter note, Credit Suisse cited net new money inflows so far this year of 3.6 billion francs at its Asia Pacific business, 7.1 billion at international wealth management, and 4.5 billion at its Swiss universal bank, whose partial public listing in 2017 was on track if market conditions permit.
