Credit Suisse to cut 5,500 jobs in 2017 after €2.3bn loss
Loss keeps pressure on chief executive Tidjane Thiam to deliver on his turnaround plan
Zurich-based Credit Suisse announced its plans for jobs cuts as it works towards its 2018 cost-cutting target. Photograph: Michele Limina/Bloomberg
Credit Suisse said it will cut its headcount by a net 5,500 jobs in 2017 after 7,250 layoffs in 2016, as it posted a 2.44 billion Swiss franc (€2.29 billion) net loss for 2016, its second straight year in the red.
The loss keeps pressure on chief executive Tidjane Thiam to deliver on his turnaround plan for Switzerland’s second-biggest bank.
The average estimate in a Reuters poll of seven analysts was for a net loss of 2.013 billion francs in the quarter.
Zurich-based Credit Suisse announced its plans for jobs cuts as it works towards its 2018 cost-cutting target. The bank did not specify where the extra cuts would be.
“We believe we are well positioned to continue to make progress with our restructuring programme in 2017 and 2018,” Mr Thiam said in a statement.
For the fourth quarter, Credit Suisse posted a 2.35 billion franc net loss, largely on the back of a roughly $2 billion charge to settle US claims the bank misled investors in the sale of residential mortgage-backed securities..
The average estimate in the Reuters poll was for a quarterly net loss of 2.01 billion francs.
Nevertheless, Credit Suisse proposed an unchanged dividend of 0.70 francs per share, in line with market expectations.
Just over 18 months into his time as chief execuitve, Mr Thiam has refocused Credit Suisse more towards wealth management and less on investment banking.
In wealth management, Credit Suisse said it suffered net outflows in the fourth quarter due to clients pulling cash to participate in tax amnesty programmes and a decision to no longer bank certain external asset managers.
The bank said all its wealth management divisions had seen positive inflows year to date.
At the end of the fourth quarter, Credit Suisse’s common equity Tier 1 capital ratio, an important measure of balance sheet strength, was 11.6 per cent, down from 12 per cent in the third quarter.
Credit Suisse also reaffirmed plans to sell 20-30 per cent of its Swiss business in an initial public offering, brushing off talk from some analysts and investors that the bank could reconsider the stake sale. It said a flotation depended on market conditions and board approval.