Credit Suisse Unveils ‘Radical’ Strategy As Q3 Loss Hits $4 Billion
Swiss bank Credit Suisse unveiled Thursday a “radical strategy” aimed to overcome a string of recent troubles that have dented its reputation. The Zurich-based bank announced plans to cut costs, lower staff counts and reduce risk. It also said it will revive the CS First Boston investment bank brand, once a stalwart of Wall Street, as it reported a 4-billion Swiss franc ($4.1 billion) loss in the third quarter.
The “historical moment” for the Zurich-based bank, as new CEO Ulrich Koerner put it, comes as Credit Suisse acknowledged a “disappointing” recent performance at a time of market and macroeconomic uncertainty. Chairman Axel Lehmann said the bank had become “unfocused,” and its board had assessed its future direction.
“Today we are announcing the result of that process -– a radical strategy and a clear execution plan to create a stronger, more resilient and more efficient bank with a firm foundation, focused on our clients and their needs,” Lehman said, insisting a “cultural transformation” was underway.
The bank plans to reduce its cost base by about 15 per cent -– or 2.5 billion Swiss francs ($2.5 billion) -– by 2025, and said a “headcount reduction” of about 5 per cent of its workforce -– about 2,700 employees -– was already underway.
Credit Suisse has sought transformations before and has faced issues including bad bets on hedge fund investments, among other troubles. Last week it announced settlements in the United States and France.
The bank said it has struck a deal to transfer a “significant portion” of its securitized products group to an investor group led by Apollo Global Management. Credit Suisse said revenues in the third quarter rose 4 per cent to 3.8 billion Swiss francs ($3.9 billion).