The Swiss flag is hoisted in front of the headquarters of the Swiss bank Credit Suisse in Zurich, Switzerland, on July 27, 2022. (REUTERS/Arnd Wiegman)
ZURICH: Credit Suisse is considering cutting about 5,000 jobs as part of a cost-cutting effort at Switzerland’s second-largest bank, a source with direct knowledge of the matter told Reuters.
The scale of potential job cuts highlights the challenges facing Credit Suisse and its new chief executive 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.
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.
Ulrich Kellner, who was promoted to CEO of Credit Suisse just a month ago, will cut investment banking operations and cut costs by more than $1 billion to help the bank recover from a string of setbacks and scandals. was given a task.
His second strategic review in less than a year assesses banking options while reaffirming its commitment to serving high net worth customers.
Credit Suisse is under pressure to turn its business around and improve its financial resilience.
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.