Thomas Gottstein, the head of the Swiss unit at Credit Suisse, over the weekend gave his first interview since the bank cancelled the IPO plan. He had some sobering conclusions on offer.
Since Credit Suisse (CS) cancelled the planned initial public offering of the Swiss unit, times have changed for Thomas Gottstein, the head of the unit, which is based in Zurich. Instead of going it (almost) alone, Gottstein has to get his team to rally around their new-old task of generating a healthy profit for the group.
And that change of perspective takes some explaining as Gottstein readily admits in an interview with «Sonntagszeitung» (behind paywall). The group’s executive committee has given its Swiss unit a set of clear targets, mainly in the shape of a pretax profit of 2.3 billion Swiss francs to be achieved in 2018.
500 Jobs to Go
To reach this target requires an annual increase in revenue by 2 to 3 percent as well as cost savings amounting to 3 percent. «Last year, we reached our target on the cost side, but not in respect to revenue,» Gottstein told the Sunday paper.
The Swiss Universal Bank (SUB), Gottstein’s unit, will thus have to continue with its efforts to save money. The bank will cut about 500 jobs by 2018 to reach the target, and Gottstein gave an early indication of where the jobs might have to go.
Backoffice, Relation Managers Under Scrutiny
Cuts are possible in the processing of transaction, where technology can replace humans. But the bank also needs to improve efficiency in mortgage lending and in customer relations, Gottstein said. Thanks to the use of digital channels in its communications with clients, the bank needs fewer relationship managers.
The CS executive remains concerned about the future of the Swiss financial market. Zurich and Geneva have lost some of their allure as financial centers and the Swiss market as a whole is in danger of losing its position among the top players.
Inflexible Labor Laws
Gottstein mentioned inflexible conditions, including those applying to working hours, as major reasons for the negative development. Important projects made it necessary to sometimes remain in the office longer, he said. Swiss labor laws demanded from employers to count the number of extra hours, whereas in London, where Gottstein had worked for a long time, such issues were handled with greater flexibility.
Gottstein is convinced that competition among financial markets will increase. The uncertainties surrounding Swiss corporate taxes following a vote this spring has increased, adding to the question marks that cloud the Swiss markets future.
