Credit Suisse warns of up to $1.6 billion loss in Q4, to cut 9,000 jobs

  • Credit Suisse has said it started 2,700 job cuts in the fourth quarter and is aiming to reduce about 9,000 positions by 2025

Agencies
Updated23 Nov 2022, 12:39 PM IST
Signage outside a Credit Suisse Group AG bank branch in Geneva, Switzerland
Signage outside a Credit Suisse Group AG bank branch in Geneva, Switzerland(Bloomberg)

Credit Suisse Group AG warned it will report a loss of up to 1.5 billion Swiss francs ($1.6 billion) for the fourth quarter as client activity remains subdued in the Wealth Management and Swiss Bank divisions, and the bank expects these market conditions to continue in the coming months.

"In its outlook statement on October 27, 2022, the bank highlighted that the challenging economic and market environment has had an adverse impact on client activity across its divisions," Switzerland's second-largest bank said.

The Zurich-based bank said in a statement Wednesday it expects to book losses in both the wealth management division and its investment banking unit due to market conditions, continued outflows of customer assets and the sale of non-core businesses.

Credit Suisse is undergoing a sweeping overhaul and will seek approval from shareholders later Wednesday for a capital raise of about 4 billion francs. As part of a plan to cut costs, the bank has said it started 2,700 job cuts in the fourth quarter and is aiming to reduce about 9,000 positions by 2025, reported Bloomberg.

The actual results will depend on “a number of factors”, including remaining performance for the rest of the year, the continued exit of non-core positions, any goodwill impairments, and outcomes of other asset sales. 

Lower deposits and reduced managed assets are expected to negatively impact the bank’s net interest income and recurring fees for the wealth unit, it said. 

As of Nov. 11, net asset outflows were about 6% of assets under management at the end of the third quarter of 2022, according to the statement. Its outflows in wealth management “have reduced substantially from the elevated levels of the first two weeks of October 2022, although have not yet reversed and were approximately 10% of assets under management at the end of the third quarter of 2022,” it said.

It also expects to incur restructuring charges and software and real estate impairments of 250 million Swiss francs in the fourth quarter. 

Credit Suisse is due to hold an Extraordinary General Meeting later on Wednesday where it will seek approval for a 4 billion Swiss franc capital increase to fund its overhaul.

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First Published:23 Nov 2022, 12:39 PM IST
HomeCompaniesNewsCredit Suisse warns of up to $1.6 billion loss in Q4, to cut 9,000 jobs

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