Skip to main content

Credit suisse axe jobs.

London faces a wave of job losses after the new boss of Credit Suisse plans to cut 9,000 roles across the bank as part of a drastic restructuring of the troubled group.

Ulrich Körner said that «nobody takes it lightly» yesterday as the bank revealed it would lower its headcount of full-time employees worldwide from 52,000 to about 43,000 by the end of 2025 to help reduce its cost base by around CHF2.5 billion, or 15 per cent. The cuts are one element of a complex strategy to try to restore the lossmaking group to profitability and put an end to years of scandals. It includes raising about CHF4 billion from investors, including Saudi National Bank, which has committed to putting in up to CHF1.5 billion, and a plan to shrink its struggling investment banking business, part of which will eventually be spun off under the resurrected First Boston brand. However, shares in the group tumbled by nearly 19 per cent in Zurich as investors baulked at the prospect of extensive fundraising and the possibility that the complicated overhaul could go wrong.

Yesterday's disclosure of heavy third-quarter net losses of CHF4 billion, which was far worse than analysts had expected, also knocked the shares. Körner declined to say how many roles would be lost from its operations in London. Much of the business in London is centred on investment banking, a primary focus of the new chief's overhaul. If the restructuring proves successful, it will cement Körner's reputation as a turnaround expert.

He was previously a top executive at the rival Swiss bank UBS, overseeing thousands of job cuts and acquiring the moniker «Uli the knife». They include suffering heavy losses from the collapse of Archegos, an investment firm, and a furore over corporate espionage. The dire quarterly results released alongside the announcement of Körner's strategy laid bare the scale of his challenge. The group's overall net loss was driven by a CHF3.7 billion impairment of deferred tax assets.

However, Körner highlighted «a weaker performance for our investment bank in particular», with the division falling to a $691 million pre-tax loss in the period. This investment bank will now be significantly scaled back through a 40 per cent reduction in risk-weighted assets, and Christian Meissner, who had been running it, has left with immediate effect. As part of the revamp, the investment bank will also be split up, with its capital markets and advisory activities housed in a New York-based unit called CS First Boston and eventually spun off, possibly through a listing. Körner's overhaul has been keenly anticipated and the subject of much speculation.

Tidjane Thiam was the first chief executive in recent years to attempt a significant revamp after his appointment in 2015. Thiam, known in the City of London from his time in charge of Prudential, the FTSE 100 insurer, aimed to tilt the Zurich-based group away from competing with US investment banks and back towards servicing wealthy clients through its wealth management business. However, in 2019, the bank became embroiled in a spying scandal after a senior executive, Iqbal Khan, was followed after resigning to join rival UBS. Khan had bought a house next to Thiam, and the argument centred on trees at the chief executive's property.

www.sba.tax

Labels:

Comments

Post a Comment

Cloud Bookkeeping

H&M struggles with profitability.

  H&M blamed high clothes prices ,  its exit from Rus­sia and a cost-cut­ting pro­gramme for an unex­pec­tedly large col­lapse in its earn­ings as the world’s second-largest fash­ion retailer’s struggles with prof­it­ab­il­ity con­tinue .  Oper­at­ing profit plunged 87 per cent to SKr820mn in the fourth quarter to the end of Novem­ber from a year earlier .  Shares in H&M fell more than 4 per cent to SKr125 . 80 yes­ter­day ,  hav­ing lost nearly half of their value since their recent peak in April 2021 .  The Swedish retailer ,  which lags behind Indi­tex ,  the Span­ish owner of Zara ,  in sales and prof­it­ab­il­ity ,  launched a SKr2bn cost-cut­ting pro­gramme last year that included 1 , 500 job losses . H&M’s sales in the fourth quarter were up 10 per cent to SKr64 . 4bn but flat in local cur­rency terms .  It said sales from Decem­ber 1 to Janu­ary 25 had increased 5 per cent in local cur­ren­cies .  «Sales in ...
2 comments
Read more

Commercial properties continue to fall

  UK commercial property values and rents are projected to «tumble off a cliff edge» in the first quarter of 2023, as estate agents warn offices will fare worst as prices fall. A survey of more than 400 commercial agents forecast a 2.9 per cent decrease in prices per square foot across the industry in the first three months of the year, with offices falling 3.1 per cent. «Where we saw the market stop still, we will see the market finding its level, people working out where things are, where value is,» he said. Listed vehicles have already seen this valuation drop in their share prices, with real estates investment trusts such as Land Securities and British Land falling by a fifth or more this year. According to the RIB estate report, offices are expected to suffer the most significant sales price falls, with nearly a third of respondents expecting them to come down by more than 5 per cent. In addition, the survey projected a 1.3 per cent fall in rents per square foot over the perio...
Post a Comment
Read more

BoE is considering to increase deposit guarantee.

  According to anonymous sources, the Bank of England is considering reforming its deposit guarantee scheme. The move comes in response to concerns that the current system may not be sufficient to protect customers in case of a bank failure. The Financial Services Compensation Scheme guarantees deposits up to £85,000 per person per institution. However, some experts have raised concerns that this may not be enough to prevent a run on banks in a significant financial crisis. As a result, the Bank of England is reportedly considering several options for reforming the scheme, including increasing protection and introducing more stringent bank regulations. A final decision on any changes will be made later this year. One option the Bank of England considers is increasing the protection offered by the deposit guarantee scheme. This could involve raising the maximum amount guaranteed per person or extending coverage to more types of deposits. Another possibility is to introduce more stri...
Post a Comment
Read more