Credit Suisse announces massive restructuring of the Group
The major bank reports a loss in the billions for the third quarter of 2022. The turnaround is to be brought about by a far-reaching restructuring of the Group, and job cuts are also planned.
Credit Suisse presents the strategy it intends to use to get back on track for success by2025. Massive savings, a restructuring of the investment bank and a strengthening of the capital base are planned. The planned sale of the Savoy Baur en Ville hotel on Paradeplatz in Zurich should also bring in fresh money: The luxury hotel is estimated to be worth up to CHF500 million.
9,000 jobs eliminated
As Credit Suisse announces, the cost base is to be reduced by 15% to CHF 14.5 billion by 2025, with savings of CHF 1.2 billion in the coming year alone. Among other things, the big bank wants to save on personnel in the future: In the fourth quarter, 5% of the workforce will be cut, corresponding to 2,700 full-time equivalents (FTEs). According to the plan, 43,000 FTEs will still be working at the bank by the end of 2025, compared with 52,000 FTEs at the end of the third quarter.
Investment bank shrinks
The investment bank is to focus on its core business in the future, which will once again operate under the name CS First Boston. The unit's risk-weighted assets will be reduced by 40%. Credit Suisse plans to sell part of the Securitized Products Group (SPG) to an investor group led by Apollo Global Management. The transaction is expected to close in the first half of 2023.
Credit Suisse plans to raise up to CHF 4 billion through two capital increases.
Net loss of 4 billion in the third quarter
As the figures for the third quarter of 2022 show, Credit Suisse had to post a net loss of CHF 4 billion (PY: CHF +434 million). However, the majority of this, CHF 3.7 billion, is attributable to the restructuring of the bank and the restructuring of investment banking. In operational terms, the pre-tax loss was CHF 342 million, compared with a profit of CHF 1 billion in the prior-year quarter.
Further, in the third quarter, the bank recorded a decline in the Group's assets under management to CHF 1.4 trillion. CHF, a decrease of 53 billion compared to the second quarter (CHF 1.45 trillion). At the Group level, there were net outflows of CHF 12.9 billion, compared to net new assets of CHF 5.6 billion in the same period last year.
Impairment losses on real estate expected
Credit Suisse also expects a net loss for the Group in the fourth quarter. Among other things, restructuring costs and value adjustments for software and real estate of around CHF 250 million will be incurred, the bank forecasts. (ah)
