The optimism surrounding a recovery in 2017 for Credit Suisse has quickly dissipated after the lender reported a loss of -$2.4 billion for the year prior, prompting another round of cuts. The news comes just one month after Credit Suisse’s CEO Tidjane Thiam championed a comeback for banks in 2017.
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Back in December, Credit Suisse announced an additional round of cuts in Switzerland, as well as plans to restructure its business in order to return to profitability after losing close to $3 billion. The bank revealed that it would be seeking to increase its cost cutting efforts by around $820 million.
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Mr. Thiam’s reorganization efforts also included a consolidation process of its Global Markets division, including a consolidation of the FX Cash and FX Options businesses into the STS operations of Credit Suisse, which are part of the Swiss Universal Bank.
2016 Weighs Outlook
This optimism was quickly quelled after Credit Suisse’s recently reported 2016 net loss of $2.43 billion, the group’s second straight year of losses. As such, Credit Suisse has opted for a familiar path – targeted job cuts to help stimulate profitability.
More specifically, Credit Suisse will cut upwards of 5,500 jobs in 2017 – this compares with a total of 7,250 cuts last year, part of its eventual 2018 cost-cutting target. The majority of job losses have been confined to the back office, IT, and branch jobs.
Moving forward, Credit Suisse is also moving ahead with a plan to offload nearly 20-30 percent of its Swiss business in an initial public offering (IPO).