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Credit Suisse flags 6,500 jobs cuts after loss

Tuesday, February 14, 2017 - 01:28

Credit Suisse is to cut up to 6,500 jobs this year after reporting a $2.43 billion net loss for 2016, and said it was examining alternatives to a planned stock market listing of its Swiss business. Sonia Legg reports.

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A new strategy but same old losses - it's been a second year in the red for Credit Suisse. Switzerland's second biggest bank posted a net loss of $2.43 billion, most analysts had expected it to be nearer $2 billion. Most of that was due to a $2 billion charge to settle US claims the bank misled investors over mortgage-back securities (SOUNDBITE) (English) KEN ODELUGA, MARKET ANALYST, CITY INDEX, SAYING: "Had that not happened it would have still been another year in the red but it wouldn't have been worse than shareholders were expecting." CEO Tidjane Thiam was brought in to stop the rot 18 months ago. He announced 7,250 job losses. But it wasn't enough - a further 6,500 jobs may now be on the cards for this year. Thiam's decision to focus on wealth management also perhaps badly timed. Investment banking has been a winner for many lenders in recent months. (SOUNDBITE) (English) KEN ODELUGA, MARKET ANALYST, CITY INDEX, SAYING: "If you are a CEO and you come into an investment bank and everywhere you look is red ink and most of it is due to the fact you had over stretched yourself on the risky side, it does make sense to reduce those risks as much as possible. Maybe the balance shifted a bit too far though." Wealth divisions have seen positive inflows this year and balance sheets are looking stronger. As a result plans to float part of its Swiss business to raise extra cash are now being reconsidered. But the proposed dividend remains unchanged at 0.7 francs per share - that's in line with expectations.

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Credit Suisse flags 6,500 jobs cuts after loss

Tuesday, February 14, 2017 - 01:28