GENEVA (AP) – Swiss bank Credit Suisse unveiled yesterday a “radical strategy” aimed to overcome a string of recent troubles that have dented its reputation, involving cost cuts, staff reductions, steps to lower risk and a cash infusion through a share purchase from a leading Saudi bank.
The Zurich-based bank also said it will revive the CS First Boston investment bank brand, once a stalwart of Wall Street, as it reported a CHF4-billion (USD4.1 billion) loss in the third quarter.
Credit Suisse announced plans to raise some CHF4 billion (USD4.1 billion) by issuing new shares to some investors, including the Saudi National Bank, which has committed to put in some CHF1.5 billion (USD1.5 billion) – putting its shareholding in the Swiss bank at just under 10 per cent.
Overall, Credit Suisse predicted restructuring charges and other costs totalling CHF2.9 billion (USD2.9 billion) in connection with its “transformation” between the second quarter and 2024, which would be paid for by divestments, leaving some businesses, raising capital and using existing bank resources. The “historical moment” for the Zurich-based bank, as new CEO Ulrich Koerner put it, comes as Credit Suisse acknowledged a “disappointing” recent performance at a time of market and macroeconomic uncertainty.
The bank plans to reduce its cost base by about 15 per cent – or CHF2.5 billion (USD2.5 billion) – by 2025, and said a “headcount reduction” of about five per cent of its workforce – about 2,700 employees – was already under way.
The bank said it has struck a deal to transfer a “significant portion” of its securitised products group to an investor group led by Apollo Global Management.
Credit Suisse said revenues in the third quarter rose four per cent to CHF3.8 billion (USD3.9 billion).
