Axel Lehmann is stepping on the gas at Credit Suisse and wants to cut the costs of the crisis-ridden big bank more quickly. A greater impact on individual areas of the bank is expected.
Credit Suisse Chairman Axel Lehmann is currently in London explaining the reorganization of Credit Suisse. Following an appearance at a banking summit hosted by «Financial Times» on Thursday, the 63-year-old Chairman told «Bloomberg TV» the following day that he would intensify efforts to restructure the group.
The bank will save over 1.2 billion Swiss francs by the end of next year, so the efforts are aimed at accelerating the restructuring, not delaying it, Lehmann said. Previously trimming costs by that amount was initially seen as an interim goal for 2023.
Faster Job Cuts?
Lehmann reiterated in the interview that outflows of client money have virtually stopped, with customers promising to return to the bank. He said that in part, that is already something he is seeing and the bank will continue to reach out to customers and return to normal. However, it may take a little time, he said.
The cost savings will likely result in larger job cuts than previously announced for the first phase of reductions, analysts say, and could also affect asset management, the bank's main business area.
Sticking to Targets
At the request of finews.ch, Credit Suisse confirmed it continues to assume it will reduce the number of full-time positions from around 52,000 currently to about 43,000 by the end of 2025 using staff reductions and natural attrition. The first round of cuts amounting to 2,700 full-time positions, or 5 percent of the group's workforce, was initiated this quarter.
Through these measures, the bank aims to reduce its cost base by around 2.5 billion francs to about 14.5 billion francs by 2025.
Cuts in Bond Sales
According to reports, job cuts will also be made in the syndicated loan and bond department, with at least one-third of its debt sales jobs worldwide going. The bank will reduce the number of employees in the bond syndicate department, which sets the prices for bond transactions, according to a «Bloomberg» (behind paywall) report, citing people familiar with the plans.
In addition, the flow business, referring to ordinary investment banking activities such as selling and trading bonds is to be trimmed. The brunt of the cuts will be in Europe, where Credit Suisse has a strong position in corporate bonds and leveraged finance, according to Bloomberg sources.
Shares Bounce From Historical Low
In addition to the cost savings, Credit Suisse is in the process of completing a capital increase of around 4 billion francs. The shares have been on a downward trend since mid-November, although on Friday they temporarily recovered more than 8 percent from a low of 2.65 francs. The fall in the price of CS shares had not surprised Lehmann.
But it's certain Lehmann is hoping the share price recovery isn't a dead cat bounce.
