Credit Suisse unveils ‘radical’ strategy as 3Q loss hits $4B

Oct 26, 2022, 11:06 PM | Updated: Oct 27, 2022, 4:44 am
FILE - Grey clouds cover the sky over a building of the Credit Suisse bank in Zurich, Switzerland, ...

FILE - Grey clouds cover the sky over a building of the Credit Suisse bank in Zurich, Switzerland, Feb. 21, 2022. Swiss bank Credit Suisse unveiled Thursday, Oct. 27, a “radical strategy” aimed to overcome a string of recent troubles that have dented its reputation, announcing cost cuts, lower staff counts, efforts to lower risk, and the revival of the CS First Boston investment bank brand as it reported a 4-billion Swiss franc ($4.1 billion) loss in the third quarter. (Ennio Leanza/Keystone via AP, File)

(Ennio Leanza/Keystone via AP, File)

GENEVA (AP) — Swiss bank Credit Suisse unveiled Thursday 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 4-billion Swiss franc ($4.1 billion) loss in the third quarter.

Credit Suisse announced plans to raise some 4 billion Swiss francs ($4.1 billion) by issuing new shares to some investors, including the Saudi National Bank, which has committed to put in some 1.5 billion Swiss francs ($1.5 billion) — putting its shareholding in the Swiss bank at just under 10 percent.

Overall, Credit Suisse predicted restructuring charges and other costs totaling 2.9 billion Swiss francs ($2.9 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.

Chairman Axel Lehmann said the bank had become “unfocused,” and its board had assessed its future direction.

“Today we are announcing the result of that process — a radical strategy and a clear execution plan to create a stronger, more resilient and more efficient bank with a firm foundation, focused on our clients and their needs,” Lehman said, insisting a “cultural transformation” was under way.

The bank plans to reduce its cost base by about 15% — or 2.5 billion Swiss francs ($2.5 billion) — by 2025, and said a “headcount reduction” of about 5% 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 securitized products group to an investor group led by Apollo Global Management.

Credit Suisse said revenues in the third quarter rose 4% to 3.8 billion Swiss francs ($3.9 billion).

Credit Suisse has sought transformations before and has faced issues including bad bets on hedge fund investments, among other troubles. Last week it announced settlements in the United States and France.

Over the summer, a Swiss court fined Credit Suisse for failing to prevent money laundering linked to a Bulgarian criminal organization a decade-and-a-half ago.

Credit Suisse, the No. 2 Swiss international bank after crosstown rival UBS, has origins that date to the mid-19th century and the early development of Switzerland’s rail network.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Former NFL QB Dilfer leading candidate to become UAB coach

Former NFL quarterback Trent Dilfer, who has been coaching a high school team in Tennessee for the last four years, is the leading candidate to become the new coach at UAB, a person with knowledge of the search told The Associated Press on Tuesday night. The person spoke on condition of anonymity because UAB was […]
58 minutes ago
FILE - A scooterist drives past a wall painted with Air India planes in Mumbai, India, Thursday, Ja...
Associated Press

India’s Tata Sons to merge Air India with Vistara airlines

NEW DELHI (AP) — India’s oldest and largest conglomerate, Tata Sons, will merge its Air India with Vistara, which it jointly runs with Singapore Airlines, in a major step toward revamping the country’s debt-laden national carrier. The merger will strengthen Singapore Airlines’ foothold in India’s fast-growing aviation market, the company said in a statement. It […]
58 minutes ago
Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquart...
Associated Press

Asian shares mostly higher ahead of Fed chair’s key speech

TOKYO (AP) — Asian shares were mostly higher on Wednesday, ahead of a closely watched speech by the Federal Reserve chief that may give clues about future interest rate hikes. Investors were also eyeing developments in China, where protests have erupted over the “zero-COVID” strategy that has confined millions of people to their homes, sometimes […]
1 day ago
Associated Press

2 dead as bomber hits Pakistan police protecting polio teams

QUETTA, Pakistan (AP) — A suicide bomber blew himself up near a truck carrying police officers on their way to protect polio workers outside Quetta on Wednesday, killing two people and wounding more than 20 others, mostly policemen, officials said. Ghulam Azfer Mehser, a senior police officer, said the attack happened when the policemen were […]
1 day ago
Lauren Gilbert, a senior manager at the Center for Jewish History (CJH), participate in a global on...
Associated Press

Holocaust survivors offered DNA tests to help find family

NEW YORK (AP) — For decades, Jackie Young had been searching. Orphaned as an infant, he spent the first few years of his life in a Nazi internment camp in what is now the Czech Republic. After World War II he was taken to England, adopted and given a new name. As an adult, he […]
1 day ago
John Kraft sits next to his yawning cat, Tux, at his hilltop farmhouse in Clear Lake, Wis., Wednesd...
Associated Press

No longer fringe, small-town voters fear democracy’s demise

HUDSON, Wis. (AP) — A word — “Hope” — is stitched onto a throw pillow in the little hilltop farmhouse. Photographs of children and grandchildren speckle the walls. In the kitchen, an envelope is decorated with a hand-drawn heart. “Happy Birthday, My Love,” it reads. Out front, past a pair of century-old cottonwoods, the neighbors’ […]
1 day ago

Sponsored Articles

...
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
...
SCHWARTZ LASER EYE CENTER

Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.
...
Day & Night Air Conditioning, Heating and Plumbing

Ways to prevent clogged drains and what to do if you’re too late

While there are a variety of ways to prevent clogged drains, it's equally as important to know what to do when you're already too late.
Credit Suisse unveils ‘radical’ strategy as 3Q loss hits $4B