Credit Suisse has announced sweeping plans to cut 9,000 jobs and raise billions of pounds from investors in a Saudi-led financing round, as part of a company-wide overhaul designed to draw a line under a string of scandals and the to help recover from a £3.5 billion loss.
The announcement follows months of speculation about the magnitude of the changes planned under new boss Ulrich Körner, who has been tasked with scaling back the investment bank and cutting costs.
Credit Suisse bosses hope investors will give the green light to plans to raise 4 billion Swiss francs (£3.5 billion), including 1.5 billion Swiss francs, from the Saudi National Bank (SNB) next month. The move would give the Saudi bank a 9.9% equity stake, making it the second largest investor behind US investment group Harris Associates.
Credit Suisse’s share price fell by 12% after the announcement.
Switzerland’s second-largest bank said it would shed 2,700 full-time employees, accounting for about a third of its planned cuts and a fifth of its 52,000 employees worldwide.
It expects the total workforce to shrink to 43,000 by the end of 2025, due to a mix of further job losses and attrition, meaning staff will not be replaced when they leave the bank. The lender has not confirmed how many of its 5,500 British employees could be affected.
“This is a historic moment for Credit Suisse,” Körner said. “We are radically restructuring the investment bank to help create a new bank that is simpler, more stable and with a more focused business model based on customer needs.”
The restructuring plans – which will put greater emphasis on the bank’s wealth management division for high net worth clients – are expected to cost about 2.9 billion Swiss francs over the next year. That will be funded by dumping some of his investments, selling parts of his business and raising fresh money from investors.
The Saudi National Bank said it planned to participate in the fundraiser to “support the establishment of an independent investment bank focused on advisory and capital markets activities”.
If approved, it will add another investment vehicle in the Middle East to the bank’s list of top shareholders, including the Qatar Investment Authority and private investment firm Olayan Group, which has ties to Saudi Arabia.
Credit Suisse also confirmed it would continue to split its investment bank as it tried to raise more money.
That means that some of its securitized products business — which buys and sells investment products backed by pools of assets such as mortgages, credit card debt and auto loans — will be sold to US investment groups Pimco and Apollo.
It will also divest part of its investment bank, which will operate under the CS First Boston brand. Credit Suisse said the company would be “more global and broader” than most boutique firms, but take a “more focused” approach than major investment banking rivals, including UBS and Goldman Sachs.
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Credit Suisse chairman Axel Lehmann said the investment bank had built a “powerful and respected” company in its 166-year history, but had become “unfocused” in recent years.
“For several months now, the board of directors has been evaluating our future direction together with the board of directors and we believe that we have left no stone unturned,” he added.
The overhaul follows a string of scandals in recent years. Credit Suisse was embroiled in the 2021 collapse of the lender Greensill Capital and the US hedge fund Archegos Capital. That year it also admitted to defrauding investors as part of the Mozambican “tuna bond” loan scandal, resulting in a fine of more than £350m.
This year, Swiss prosecutors found the bank guilty of aiding money laundering on behalf of the Bulgarian mafia. The bank denies wrongdoing and is appealing the ruling.
Credit Suisse also came under fire after investigating Suisse’s secrets, which revealed that it had served clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes for decades.
“The new board of directors is focused on restoring trust through the relentless and responsible execution of our new strategy, keeping risk management at the heart of everything we do,” said Körner.