The first quarter is normally the most lucrative period for the industry, when investors put their money to work at the start of the year, but this year revenues have been hit by record low interest rates, low commodity prices and slower growth in emerging markets.
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Swiss financial services firm Credit Suisse Group will eliminate additional 2,000 jobs this year as part of its plans to step up cost cuts.
Credit Suisse Group AG is planning to speed up and deepen cuts to the investment bank, five months after it announced an overhaul, said a person with knowledge of the discussions. Thiam said last month he would accelerate staff reductions, with 4,000 jobs cut by the end of this year, citing a “challenging” environment.
Thiam had already announced a sweeping overhaul of the bank’s operations in October previous year, shaving off excesses in its investment banking department and refocusing on its private banking and wealth management units.
He declined to say whether 1 billion francs in restructuring costs expected this year would allow a 2016 net profit.
The company blamed a “high and inflexible cost base” and “volatile market conditions”.
For 2018, Credit Suisse lifted its cost reduction target to at least 4.3 billion francs gross savings from 3.5 billion francs. “The measures we are taking to strengthen our capital base and reduce our operating costs will improve our resilience and flexibility going forward”.
Credit Suisse said on Wednesday that equities will remain “a core area of focus” and that it will continue to build on cash, prime and equity capital markets businesses, while exiting most of the distressed credit, European securitized product trading and long-term illiquid funding.
Thiam said that write-downs at Global Markets, which totaled US$633 million in the fourth quarter of 2015, were lower in the first quarter at US$346 million as of March 11, 2016.
During a conference call, Credit Suisse Global Markets CEO Tim O’Hara said the newly announced reductions should lead to “more consistent returns”, less risk, and a business better equipped to augment wealth management. The Zurich-based bank could also update investors on first-quarter earnings, after rival Wall Street banks warned their shareholders about a drop in revenue from trading and dealmaking.
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Shares in the company rose 2 per cent to 14.61 Swiss francs at 0858 GMT, having fallen by more than a third this year.
