Swiss banking giant slashes more jobs in cost-cutting exercise

Swiss banking giant slashes more jobs in cost-cutting exercise
File photo: Fabrice Coffrini/AFP
Credit Suisse, Switzerland's second-biggest bank, intends to cut more than 5,500 jobs during 2017, said news agencies on Tuesday.
That's a continuation of the cost-cutting policy that saw the bank slash over 7,200 jobs last year in an attempt to reduce its fixed operating base cost. 
The news came as the bank also said it booked a net loss of 2.4 billion Swiss francs (2.2 billion euros, $2.3 billion) in 2016, after agreeing to a massive settlement with the US authorities last month over its role in the so-called sub-prime crisis in 2008.
Credit Suisse said in a statement that its net loss was narrower than a year-earlier figure of 2.9 million Swiss francs.
“2016 was the first full year of implementing our new strategy and it was a challenging and busy 12 months,” said chief executive Tidjane Thiam.
“We have significantly reduced our fixed operating cost base and increased our operating leverage.”
Last month, the US authorities announced a $5.28 billion settlement with Credit Suisse over its role in the sale of the kind of toxic securities that led to the global financial crisis of 2008.
Federal prosecutors say Credit Suisse has admitted that between 2005 and 2007 it knowingly deceived investors in the sale of complex securities derived from residential mortgages.
The system-wide failure of such securities in 2008 caused a cascading wave of bankruptcies and crises that touched off the Great Recession, which cost tens of millions of jobs around the world.
“We have reached an agreement with the US Department of Justice on the … matter, thus removing a major source of uncertainty for our future,” CEO Thiam said on Tuesday.
With the bank's US case resolved, Thiam can redouble attention on a reform drive he laid out after taking charge of Credit Suisse following a stint leading insurance giant Prudential.
Thiam wants the bank to focus more on wealth management and de-emphasize its riskier investment banking operation.
He has also prioritised cost cutting, trimming more than 7,000 jobs mostly in New York and London over the last year, while eyeing ways to boost capital.
Much attention has been focused on tentative plans for an initial public offering for its Swiss unit.
Thiam on Tuesday told the Bloomberg news agency that the Swiss IPO was “a good option” but cautioned that other scenarios were “continuously” being looked at to improve Credit Suisse's capital.
On the Swiss stock exchange, Credit Suisse shares were outperforming the overall market, showing a gain of 2.7 percent to 15.16 Swiss francs, while the blue-chip SMI index was little changed.
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