Credit Suisse looks to speed up cuts as revenue outlook worsens: Sources
A Christmas tree is decorated in front of the headquarters of Swiss bank Credit Suisse in Zurich, Switzerland on Nov 23, 2022.
PHOTO: Reuters
PUBLISHED ONDecember 02, 2022 1:55 AM
ZURICH - Credit Suisse is looking for ways to accelerate cost cuts announced just weeks ago as client outflows and a slowdown in activity weigh on its revenue outlook, three people with knowledge of the talks said.
The cost savings are likely to involve more job cuts than previously announced for the first wave of reductions, including in its mainstay wealth business, said the sources, who asked to remain anonymous because the discussions are private.
Credit Suisse is cutting about 5per cent of its private banking headcount in the Asian financial hub of Hong Kong, two of the sources said, targeting mainly mid and junior level bankers, in cuts that go deeper than reductions outlined before.
Credit Suisse declined to comment on job cuts in the Hong Kong private banking business.
Credit Suisse said in October it intends to reduce its cost base by around 2.5 billion Swiss francs ($3.6 billion) to about 14.5 billion in 2025.
"As previously outlined, the bank is already making strides with these cost-reduction activities, following a clear execution roadmap," the bank told Reuters on Thursday.
It had said it would eliminate 2,700 jobs starting in the fourth quarter as it scales back its scandal-hit investment bank to increase its focus on wealth and asset management.
However, the loss-making bank has seen clients pull 6 per cent of assets under management in the six weeks through Nov 11, a drain that had led to the liquidity at some of its entities drop below regulatory requirements. The outflows also hit revenue.
Client outflows have partially reversed and very few clients have left entirely, Credit Suisse Chairman Axel Lehmann told a Financial Times conference on Thursday.
Credit Suisse shares fell to a fresh record low on Thursday nearing the offer price of the 2.24 billion Swiss franc rights issue needed to help stabilise its finances.
The fresh round of private banking cuts signals challenges facing Credit Suisse as it shifts towards banking for the wealthy, after vowing to ramp up wealth management globally.
Two sources said the cuts in the Hong Kong private banking team mainly involved those associated with the China wealth management business.
Credit Suisse's other wealth hub in Asia is in Singapore.
In all, the bank said in October, it plans to cut 9,000 jobs of the 52,000 it had at the time.
Source: Reuters
