Credit Suisse has reported a 302 million Swiss francs (US dollar 310 million) loss in the first quarter amid shrinking market volumes and client activity, while pressing apace with planned staff reductions.
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The bank said it was confident it could meet or beat its 1.7 billion franc target of cost savings by the end of the year.
Credit Suisse on Tuesday posted a loss for the first quarter, but also said that the financial services firm had already given pink slips to half of the 2,000 employees slated for layoffs.
“While we saw tentative signs of a pick-up in activity in March and then in April, subdued market conditions and low levels of client activity are likely to persist in the second quarter of 2016 and possibly beyond”, Thiam, who took over in July and outlined his blueprint for Switzerland’s second-biggest bank on October 21, said in a statement.
Still, the loss was not as bad as investors had feared, and the shares rose 3.7 percent to 13.93 francs in Zurich.
Thiam, 53, has said he expects restructuring to cost 1 billion francs in 2016. Back in 2013 and 2014, the group was among the top three biggest investment banks in that business line by revenue.
It’s been a tough 2016 for Credit Suisse.
After several earnings from the sector, a few headwinds have been common during the first quarter.
In order to combat the issues, Credit Suisse is not only focusing on wealth management, the bank has been on a cost-cutting spree, in a bid to drive growth across the business. As of May 10, it had eliminated 3,500 jobs as part of efforts to cut 6,000 positions by year end, according to a presentation. Analysts had said the ratio would be a focus for investors, with Morgan Stanley estimating a drop to 11.1 per cent. “If we have to take losses in order to accelerate that and release the capital, that’s going to be a much better trade than keeping the operational structure around that going”.
The bank recorded a loss for the second consecutive quarter. His push away from the relatively volatile investment banking industry has been applauded by major investors.
Credit Suisse’s Switzerland-based Swiss Universal Bank unit attracted 700 million francs in net new assets for its private banking business, less than half of the amount realized in the same period previous year.
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Some analysts stopped short of saying Credit Suisse had put the worst of the restructuring behind it.
