Investment bank disintegration
It is now clear where Credit Suisse will cut 5,000 jobs
Credit Suisse must save. Thousands of jobs will be cut as a result. Much of it is in the United States, where CS is giving up investment banking. She wants to focus on rich Chinese in the future.
Credit Suisse has been a major construction site for months now.
Credit Suisse’s board is negotiating a comprehensive dissolution of the investment bank. According to preliminary scenarios, more than 5,000 jobs are at risk, mainly in the USA. The reason: The bank wants to save and focus on less risky private banking. This was reported by “SonntagsZeitung”.
Associated with such a withdrawal from the United States write-offs of billions and the eventual abandonment of playing an important role on Wall Street in New York. There is still resistance in the board of directors. But there is not much left for the second largest Swiss bank if it finally wants to break out of its loss zone.
The rich Chinese should fix it
While CS is being dismantled in the USA, it wants to build in China. Contrary to all rumors, the bank does not want to withdraw from China despite the political risks. Instead, from 2023, they will start introducing themselves to wealthy Chinese as asset managers, Benjamin Cavalli, Asia President, said in an interview with Reuters.
According to the official plan, savings should be made in the large bank all over the world, especially the investment bank with 17,000 employees. The bank does not say exactly how, and does not want to comment on savings measures.
Two new problems
But one thing is certain: There are two other problems associated with the current austerity programme: According to “SonntagsZeitung”, a downsizing of the investment bank will lead to massive writedowns – there is talk of up to six billion francs. This means that CS will have to raise capital again.
In addition, the question arises whether the austerity program is sufficient at all. Koerner announced at the end of July that costs should be cut to below 15.5 billion Swiss francs over the medium term. For comparison: for the current year, the house of money assumes 16.8 billion Swiss francs.
The reduction came as a result of a change in strategy announced by the bank in the summer. After billions in losses recently, the bank wants to cut costs by 1 to 1.5 billion Swiss francs. The reorganization was also accompanied by a change of leadership: Thomas Gotstein (58) was replaced as CEO by Ulrich Koerner (59). (pbe)
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