Credit Suisse to cut 4,000 jobs after massive loss

Credit Suisse will speed up its plan to cut 4,000 jobs, the major Swiss bank said Thursday, as it reported a net loss of 2.9 billion francs (2.7 billion dollars) in the last year.

The bank had made a profit of 1.9 billion francs in 2014.

The staff cuts would reduce by 8 per cent the bank's total staff of 48,200.

After Tidjane Thiam took over as chief executive of Credit Suisse in July, he has been implementing a new strategy of focusing more on managing the assets of wealthy clients, while scaling back the volatile business with investment banking.

After Credit Suisse went over its books under the new strategy at the end of last year, it scrapped 3.8 billion francs from the balance sheets, mainly resulting from writing off its acquisition of the US investment bank Donaldson, Lufkin&Jenrett in the year 2000.

In addition, the negative result included a pre-tax loss of 2.5 billion francs in Credit Suisse's in-house bad bank, as well as 821 million francs earmarked for legal disputes.

Thiam said that the bank's business had faced growing headwinds from weaker economic growth in China, dropping oil prices and the strong value of the franc, among other factors.

"Clearly the environment has deteriorated materially during the fourth quarter of 2015 and it is not clear when some of the current negative trends in financial markets and in the world economy may start to abate," he said.

Given these challenges, Thiam announced that the bank would reduce staff more quickly than initially planned and would also speed up other cost-saving measures.

Credit Suisse shares intermittently dropped more than 12 per cent to 14.49 francs on the Zurich stock exchange after the earnings announcement, reaching the lowest value in more than two decades.

Last update: Thu, 04/02/2016 - 12:27

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