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

Google has launched its Bard chat­bot.

  Google has launched its Bard chat­bot in a move to rival OpenAI’s pop­u­lar Chat­GPT, as it seeks to make up lost ground in the race to com­mer­cial­ise gen­er­at­ive arti­fi­cial intel­li­gence tech­no­logy. Google said that Bard, which provides answers to text­based ques­tions, will be run sep­ar­ately from its Google Search engine. In recent weeks, gen­er­at­ive AI has also been integ­rated into widely used pro­ductiv­ity applic­a­tions, such as Google’s Work­space includ­ing Google Docs and Gmail, and Microsoft’s Office 365 soft­ware, as well as into pop­u­lar apps such as Duolingo, allow­ing mil­lions of people to start inter­act­ing with the tech­no­logy. «We want to get feed­back and gradu­ally phase up the num­ber of people who have access to Bard, and the reason for that is we want to be able to test and learn from that before we roll it out very widely,» said Zoubin Ghahramani, vice-pres­id­ent of Google Research. Bard is built on top of Google’s AI tech­no­logy known a...
3 comments
Read more

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more