It appears that the reorganisation of Credit Suisse is not taking effect quickly enough. Therefore, CEO Tidjane Thiam has announced further austerity measures. In addition to this, planned job cuts will be accelerated.
Switzerland’s second largest bank is upping the ante in cost reduction measures by announcing an increase to their 2018 cost reduction target from 3.5 billion francs gross savings to at least 4.3 billion francs, driving the absolute operating cost base below 18 billion francs by 2018. For 2016, the bank now aims to achieve 1.7 billion francs in cost savings.
Asian Private Banking on Track
As for Asia the bank says that APAC has continued its solid performance in Private Banking in the first quarter of 2016 with net new asset inflows of 3.6 billion francs year to date, delivering stable growth and momentum to the Private Bank.
Recruitment of relationship managers, a key factor in growing the APAC business, remains positive, with the wealth management platform attracting talent from across the region. The close collaboration between Private Banking and Investment Banking continues to be a source of strength for the APAC division.
Investment Banking revenues in APAC are down in the first quarter 2016 year to date, when measured against the same exceptional period of 2015, and are broadly flat against the same period in 2014. The business the bank claims, remains on track.
More Reductions
In order to meet the cost saving targets though the CEO has said that further savings must be made across more business areas. On Global Markets activities the bank said the combination of a high and inflexible cost base, exposure to illiquid inventory in fixed income, historically low levels of client activity and challenging market conditions led to disappointing financial results. The bank is now engaged in a further restructuring of the Global Markets business.
Accelerated job cuts
The bank has announced a headcount reduction of 6,000, (an increase of 2'000 on original numbers), of which 2,800 have been actioned this year to date. Every division will be expected to contribute to the cost savings and headcount reductions over the coming quarters.
