• Switzerland's news in English
 
app_header_v3
New Credit Suisse CEO announces 5,000 job cuts
Around 1,600 jobs will go in Switzerland under the bank's new plan. Photo: AFP

New Credit Suisse CEO announces 5,000 job cuts

AFP/The Local · 21 Oct 2015, 14:34

Published: 21 Oct 2015 14:34 GMT+02:00

Thiam, a French citizen originally from the Ivory Coast, revealed the new strategy at an annual investors meeting, held as Switzerland's second-largest bank reported a 24-percent year-on-year net profit slump in the third quarter.

The bank's stock took a beating on the results, plunging nearly five percent in the morning. By early afternoon the share price had recovered slightly and was down 2.4 percent at 24.29 Swiss franks.

Giving details of Credit Suisse's new strategy, Thiam said the bank was "taking decisive action to strengthen our balance sheet and capital position to the point where it will not be any more a source of concern for our
clients, our investors or our regulators".

In concrete terms, the bank aims to save 3.5 billion Swiss francs ($3.7 billion, €3.2 billion) by the end of 2018 by, among other things, cutting loose a significant number of the some 60,000 people it employs globally.

In all, some 5,000 jobs are likely to be cut worldwide, including 1,600 in Switzerland, Thiam said on a conference call.

Credit Suisse also aims to raise a total of 6.05 billion Swiss francs ($6.3 billion, €5.6 billion) by selling stock to selected shareholders and existing investors. Shareholders will be asked to vote on the move on November 19th.

"We are rebooting the company, we are solving our capital issues," Thiam told Bloomberg Television.

"One of our objectives coming in was to take capital off the table, to raise enough capital so that this would not be again a topic of conversation at quarterly results," said Thiam, who was brought in four months ago to
restore investor confidence in the struggling bank.

As part of its new strategy, the bank, which last year was slapped with a whopping $2.8-billion US fine after pleading guilty to having helped rich Americans evade taxes, also said it aimed to get out of wealth management in the United States.

To do so, Credit Suisse said it planned to transfer its US wealth management activities to the Wells Fargo bank, and instead concentrate on wealth management in Asia.

The bank also said it planned to "right-size" its footprint in London by transferring some 1,800 positions from the British capital to less expensive regions such as India.

IPO on horizon

Credit Suisse, whose revenues have been hit by tougher capital requirements and record low interest rates, said it would restructure three regional divisions: the Swiss Universal Bank, Asia Pacific, and International Wealth Management.

In what some analysts said was the most significant announcement of the day, the bank said it plans an initial public offering for between 20 and 30 percent of the Swiss unit by the end of 2017.

Credit Suisse said it would split its securities unit into an investment banking and a markets business unit.

"I am confident we have the right structure and the right leadership to take our strategy forward," Thiam said in a statement.

Story continues below…

IG analyst Laurent Bakhtiari hailed Thiam, a former Ivory Coast government minister and former head of British insurer Prudential, for making the announcement so quickly after taking over from longtime chief Brady Dougan in June.

"It looks like a dramatic movement but Thiam is just doing what Dougan should have done years ago to improve the share price," Bakhtiari said lauding his "drastic, but necessary" announcements, particularly the aim to develop profitable activities in Asia and cut down leveraged businesses.

The enthusiasm for Credit Suisse's new strategy was, nonetheless, tempered by its disappointing third-quarter results.

Net profits shrank 24 percent to 779 million Swiss francs ($815 million, €718 million) from a year earlier, and revenues slipped eight percent to 5.98 billion Swiss francs, the bank said.

Pre-tax earnings at Credit Suisse's private banking and wealth management unit plunged 31 percent to 647 Swiss million francs.

For more news from Switzerland, join us on Facebook and Twitter.

AFP/The Local (news@thelocal.ch)

Your comments about this article

Today's headlines
WHO calls for action against air pollution
File photo: Issouf Sarego/AFP

Nine out of 10 people globally are breathing poor quality air, the World Health Organization has said.

Two arrested in police raid on Basel mosque
File photo: Michele Limini/AFP

Police in Basel raided a controversial mosque in the city and arrested two people on Tuesday morning, Swiss media reported.

Families slapped with hefty rise in health costs
File photo: Marcel Grieder

Health insurance premiums will rise by on average 4.5 percent for adults and 6.6 percent for children in 2017.

Neuchâtel votes no to foreigners running for office
Photo: kuhnmi/Flickr

Neuchâtel voted on Sunday against an initiative that would have made it the first Swiss canton to allow foreigners stand in cantonal elections.

Swiss voters say no to higher pensions
Photo: AFP

Swiss voters on Sunday rejected a plan to increase pension payments by ten percent.

Italians enraged by Ticino foreign worker vote
File picture of Lega Nord leader Roberto Maroni. Photo: AFP

The leader of Italy's Lega Nord is plotting "adequate counter-measures".

EU warns Swiss over vote to curb cross-border workers
Swiss President Johann Schneider-Ammann (R) and EC President Jean-Claude Juncker met in Zurich on September 19th to talk about the implementation of Swiss immigration restrictions. Photo: AFP

The EU warned Switzerland on Monday over a vote by one of its cantons backing curbs on migrants, an issue being closely watched in London as a possible template for Brexit negotiations.

Some deodorants could cause breast cancer: Swiss study
Twelve thousand women participated in a race against breast cancer in Le Mans, France, October 2014. Photo: AFP

The study suggests a link between aluminium salts and breast cancer.

Ticino votes to favour local workers over foreigners
Airolo in the Gotthard Pass. Photo: Dmitry A. Mottl

Voters in Ticino on Sunday strongly backed an initiative giving preference to local workers over foreigners.

France demands 45,000 Swiss accounts in tax hunt
Photo: AFP

France is tracking down UBS account holders.

Sponsored Article
7 tips for learning Swiss French
Photo: AFP
National
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
National
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Sponsored Article
Why Jordan is the ‘Different’ East
Photo: File
Politics
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Education
Muslim pupils must shake hands – ‘no ifs and buts’
Photo: AFP
Society
Swiss ‘slave children’ to finally get compensation
Photo: Jan Geerk/Swiss-image.ch
Lifestyle
Zurich named ‘greenest’ city on the planet
Photo: Swiss
National
Brawl over seats forces Swiss to abort flight
Photo: Daniel Stockhammer
Culture
Research shows typical Swiss chalets ‘not actually Swiss’
Photo: AFP
National
Switzerland to get nationwide disaster alert system
Photo: S3
National
Swiss space firm boss left badly injured in violent attack
Photo: ETH Zurich
Education
ETH Zurich crowned best uni in continental Europe – again
File photo: Martin Abegglen
National
Report: Swiss citizenship rules leave some stateless
Photo: Fabrice Coffrini/AFP
National
Fatal crash: pilot told to fly below safe altitude
Photo: Peter Linke
Business & Money
Elderly Italian on benefits stashed €1m in Swiss bank
Photo: Stuart Richards
Society
Court sides with chickens in dispute over noisy henhouse
Photo: SAC
Lifestyle
Hiking: 7 incredible Swiss Alpine Club cabins
Photo: David Abercrombie
National
Swiss politician arrested over illegal entry of migrants
Photo: Coiffure X
National
Chewbacca stolen in ‘terrorist attack’ on Swiss hair salon
Photo: AFP
National
Foreigners in Switzerland surpass 2 million mark
Photo: AFP
National
Expert predicts major quake for Switzerland by 2040
Photo: The Local
National
Geneva runs out of permits for non-EU workers
Photo:C Carlstead
National
Geneva advises teachers on religion in school
4,331
jobs available