Credit Suisse Group AG plans to eliminate an additional 2,000 jobs this year and deepen cuts at the investment bank, five months after chief executive officer Tidjane Thiam announced an overhaul of the Swiss lender.
The Zurich-based bank plans to cut risk-weighted assets in global markets, which houses securities trading, to about US$60 billion this year, compared with a previous target of about US$83 billion, with the unit projected to post a loss in the first quarter, the company said in a statement yesterday.
Credit Suisse said it is targeting 6,000 job cuts this year, of which 2,800 have already taken place, with gross savings of 1.7 billion Swiss francs (US$1.7 billion).
Last month, the bank said it was cutting roughly 4,000 jobs to reduce costs after announcing a massive pre-tax loss in the fourth quarter last year.
Thiam is seeking to stem a slump in shares, down about 41 percent since he announced the company’s overhaul in October last year, as a drop in energy costs, record-low interest rates and cooling emerging-market growth eroded trading revenue.
“Our efforts aim at putting Credit Suisse in a position to generate capital and grow profitably in the medium and long term,” the bank said in the statement. “The measures we are taking to strengthen our capital base and reduce our operating costs will improve our resilience and flexibility going forward.”
Credit Suisse said it is targeting net cost savings of at least SF3 billion by 2018, up from SF2 billion, while costs at global markets will be cut to SF5.4 billion in that period from SF6.6 billion at the end of last year.
The bank said that global markets’ performance had a “disappointing” fourth quarter, with “continued pressure” in the following three months. Bonuses for the businesses bankers were cut by about 35 percent last year, it said.
Equities will remain “a core area of focus,” Credit Suisse said, adding that it would continue to build on cash, prime and equity capital markets businesses, while exiting most of the distressed credit, European securitized product trading and long-term illiquid funding.
The Swiss lender, which seeks to focus on wealth management as part of Thiam’s overhaul, “will emerge from this set of actions significantly stronger” next year, it said.
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