Credit Suisse to cut over 5,000 jobs this year after posting $2.4bn loss

Swiss lender cut over 7,000 jobs last year but plans more redundancies in a bid to reach cost-cutting goals by 2018.

Italy banks — The Credit Suisse logo is seen at the headquarters in downtown Milan, Italy, March 9, 2016 REUTERS/Stefano Rellandini/File Photo

Credit Suisse has unveiled plans to cut over 5,000 jobs this year as part of a drastic cost-cutting strategy aimed at boosting its earnings.

Switzerland's second-largest lender said on Tuesday (14 February), that it will cut 5,500 jobs over 2017, on top of the 7,250 positions it cut last year, as it strives to reach its cost-cutting target by 2018.

Group chief executive Tidjane Thiam, who took over at Credit Suisse ‎from British insurer Prudential in July 2015, has shifted the bank's focus from investment banking to wealth management and said the lender was on target to reach its cost-saving goals.

Credit Suisse's shares fell by over a third in the first quarter of 2016 but, under Thiam's stewardship, the lender raised approximately CHF6bn (£4.7bn) in capital since 2015.

"We believe we are well positioned to continue to make progress with our restructuring programme in 2017 and 2018," the Credit Suisse boss said in a statement.

News of the job cuts came as the lender posted a CHF2.35bn loss in the fourth quarter of its financial year, on the back of a $2.48bn (£1.98bn) fine it agreed to pay to settle claims it misled investors in the lead-up to the 2008 financial crisis over the sale of residential mortgage-backed securities (RMBSs).

The bank added its wealth management division reported net outflows in the quarter, largely due to its decision to no longer bank certain external asset managers. However, in the year to date, the business has so far recorded positive inflows.

Credit Suisse, which confirmed it will pay a dividend of CHF0.70 per share, in line with market expectations, also reiterated plans to sell a stake between 20% and 30% in its Swiss business in an initial public offering.

Last month, Noreen Doyle, vice-chair of the board of directors at Credit Suisse, said that the firm would move some of its operations out of the UK. "We are in the early stage of looking at alternatives outside of the UK," she was quoted as saying by Irish Times.

While she did not comment if Dublin would emerge as a beneficiary, she said her company was currently looking at various European cities.