Investment bank looks to downsize by moving posts abroad or cutting jobs, as several banks weigh up potential results of vote on EU membership
The cuts, part of a $6.3bn (£4.1bn) restructuring plan introduced by the new chief executive, Tidjane Thiam, which involves slimming down the group’s investment bank, include axing about a third of the posts at Credit Suisse’s London office.
“There’s absolutely no point in so many people in back-office jobs being located in Canary Wharf, where rents are some of the highest in the world, ” said a source.
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Some of the job losses will come through attrition, with no new jobs advertised in certain positions in London and leavers not being replaced.
The cuts are part of a plan to reduce the bank’s cost-base worldwide. There will be 1, 600 job cuts in Switzerland and 2, 000 in the US, where Credit Suisse’s private bank will be transferred to Wells Fargo. The bank wants to shave about 10% off its cost base.
Thiam has been working on the strategy review since he joined from Prudential in July. He wants to focus more on private banking and wealth management while, in common with other European groups grappling with the stricter regulatory regime that followed the financial crisis, reducing the scope of the investment bank.
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Thiam said the bank was “taking decisive action to strengthen our balance sheet and capital position to the point where it will not be any more a source of concern for our clients, our investors or our regulators”.
Net profits shrank 24% to 779m Swiss francs (£527) from a year earlier, and revenues slipped 8% to 5.98bn Swiss francs, the bank said.
The cuts come at a time when big banks are thinking carefully about their presence in London in the run-up to the vote on whether the UK should remain part of the EU.
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Banks are working on scenarios in which many of their operations are moved away from London in the event of a vote to exit.
Jobs in London’s financial and related professional services industry reached an all-time high of 729, 600 in June 2015, the latest survey by lobby group TheCityUK said this month.
But tough regulation imposed since the financial crisis, high real estate costs, and uncertainty about Britain’s membership of the EU have prompted a number of big banks, including HSBC, to look at the economic viability of remaining in the City.
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Credit Suisse said it aimed to raise a total of $6.3bn by selling stock to selected shareholders and existing investors. Shareholders will be asked to vote on the move on 19 November.
“One of our objectives coming in was to take capital off the table, to raise enough capital so that this would not be again a topic of conversation at quarterly results, ” said Thiam, who was brought in to restore investor confidence in the struggling bank.You are about to change your browser's location settings for . For the most relevant services and products, choose your regional site.
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