Credit Suisse considering cutting about 5,000 jobs – source

Logo of Credit Suisse Bank in Geneva, Switzerland on June 9, 2022. REUTERS/Denis Balibouse

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ZURICH (Reuters) – Credit Suisse (CSGN.S) is considering cutting about 5,000 jobs as part of a cost-cutting effort at Switzerland’s second-largest bank. told Reuters.

The scale of potential job cuts highlights the challenges facing Credit Suisse and its new chief executive, Ulrich Kellner, as he seeks to level the bank after a string of scandals.

The bank declined to comment, saying any reports of results were speculative and only reiterating that it would provide an update on its strategy review in third-quarter earnings.

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Credit Suisse has dubbed 2022 a ‘transition’ year as it restructures its investment bank to reduce risk-taking and strengthen asset management.

The Zurich-based bank has dismissed speculation that it could be acquired or split.

Discussions over job cuts are ongoing and the number of cuts could still change, the sources said. Swiss newspaper Blick previously reported that more than 3,000 jobs would be cut.

Credit Suisse has already said it will reduce costs by less than CHF 15.5 billion ($15.8 billion) over the medium term, compared to an annualized CHF 16.8 billion this year.

So far, no details of the job cuts have been disclosed.

Koerner, who was promoted to CEO just a month ago, was tasked with winding down investment banking operations and cutting costs by more than $1 billion to help the bank recover from a string of setbacks and scandals. rice field.

His second strategic review in less than a year assesses banking options while reaffirming its commitment to serving high net worth customers.

Swiss lenders are under pressure to turn their businesses around and improve their financial resilience.

Vontobel analyst Andreas Venditti said: “It can lead to a vicious cycle of fewer jobs, lower service and customers leaving.”

Mr. Venditti highlighted another conundrum.

Analysts at Deutsche Bank estimate that a recapitalization of CHF 4 billion may be needed to strengthen buffers and fund reforms.

After a tumultuous two years punctuated by huge losses, a rare court conviction against a Swiss bank and a 40% plunge in its share price, restructuring expert Koerner, 59, announced in August that he had filed for Thomas Gottstein’s He took over as CEO.

Between April and June, the bank posted losses of CHF 1.59 billion and increased litigation costs. In that investment bank alone, he lost CHF 1.12 billion before tax.

Banks are also plagued by $5.5 billion in losses from the default of US family office Archegos Capital Management and the closure of a $10 billion supply chain finance fund linked to failed UK financier Greensill.

In June, Credit Suisse was also found guilty of failing to prevent money laundering by a Bulgarian cocaine ring in Switzerland’s first criminal trial of a major bank. He is appealing the conviction.

In a sign Credit Suisse hopes its fortunes will improve, a senior executive told Reuters it is still betting heavily on China and plans to launch a wealth business there next more

The bank aims to start offering wealth management services in China next year on the back of securing full ownership of a local securities venture.

($1 = 0.9825 Swiss Francs)

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Reported by Oliver Hirt, written by Michael Shields. Edited by Elisa Martinuzzi, John O’Donnell, Alexander Smith, Jane Merriman

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