Credit Suisse reports plunging profits

Swiss banking giant Credit Suisse said on Wednesday its first quarter profits plunged to just 44 million francs ($48.3 million) from 1.1 billion francs a year ago amid debt losses.

Published: 25 April 2012 10:09 CEST

“Our reported results were adversely impacted by accounting driven fair value losses due to tightening of our own credit spreads,” said the bank’s chief executive Brady Dougan, pointing out that the impact of the losses reached 1.6 billion francs.

Its investment banking division’s earnings before tax fell a third for the first three months of the year from the same period last year, while those of its private banking unit were down 27 percent.

The bank also reported net outflows of 7.1 billion francs for the quarter.

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Credit Suisse slashes jobs, branches to move 'online'

A Credit Suisse branch. Photo: FABRICE COFFRINI / AFP

“In the last two years alone, use of online banking at Credit Suisse has grown by approximately 40 percent, while the use of mobile banking has more than doubled,” the bank said in a statement.

“The COVID-19 crisis has further accelerated these trends. In contrast, the number of visits to branches has been declining for years.

“Credit Suisse will introduce a new digital offering and a future-oriented branch concept at the end of October.”

The bank also plans to merge the activities of regional subsidiary Neue Aargauer Bank with those under the Credit Suisse brand to avoid duplication.

READ: How to open a bank account in Switzerland

With its realignment, the bank intends to reduce annual costs by around 100 million Swiss francs ($110 million, 93 million euros) from 2022 onwards. It plans to cut the number of bank branches from 146 to 109.

Meanwhile up to 500 jobs could be axed, Andre Helfenstein, head of the bank's operations within Switzerland, told reporters during a conference call.

The restructuring costs are expected to be 75 million Swiss francs. “Digitalisation is happening all around us,” Helfenstein said in a statement.

“The changes we are making to our branch network — while simultaneously investing in digital solutions and in advisory services for clients with more complex needs — represent a logical step forward.”

In late July, the bank's new chief executive Thomas Gottstein unveiled his plans for Credit Suisse, which involved regrouping its different investment bank activities.

Gottstein took charge in February after Tidjane Thiam was ousted over a massive spying scandal.

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