Credit Suisse looks to speed up private banking cuts

Three people with knowledge of the talks said that ZURICH Credit Suisse was looking for ways to speed up cost cuts announced just weeks ago as client outflows and a slowdown in activity weigh on its revenue outlook.

The cost savings are likely to include more job cuts than previously announced for the first wave of reductions, including its mainstay wealth business, according to sources who asked not to be identified because of the private nature of the discussions.

Credit Suisse is cutting about 5 per cent of its private banking headcount in the Asian financial hub of Hong Kong, targeting mainly mid and junior level bankers, in cuts that go deeper than the reductions outlined before, according to two of the sources.

Credit Suisse wouldn't say anything about job cuts in Hong Kong's private banking business.

In October, Credit Suisse said it intends to reduce its cost base by around 2.5 billion Swiss francs $2.67 billion to around 14.5 billion by the year 2025.

Following a clear execution roadmap, the bank is already making strides with these cost-reduction activities, as previously outlined, according to the bank.

It had said it would eliminate 2,700 jobs starting in the fourth quarter as it scales back its investment bank's scandal-hit investment bank to focus on wealth and asset management.

The loss-making bank has seen clients pull 6 per cent of assets under management in the six weeks through Nov. 11, a drain that had led to the liquidity at some of its entities falling below regulatory requirements. Revenue was also hit by the outflows.

Credit Suisse Chairman Axel Lehmann told the Financial Times on Thursday that client outflows have partially reversed and very few clients have left completely.

Credit Suisse's shares fell to a new record low on Thursday near the offer price of the 2.24 billion Swiss franc rights issue needed to stabilise its finances.

The new round of private banking cuts shows challenges facing Credit Suisse as it shifts towards banking for the wealthy, after vowing to ramp up wealth management globally.

Two sources said the cuts in the Hong Kong private banking team mainly involved those associated with the China wealth management business.

In October of this year, the bank said it plans to cut 9,000 jobs of the 52,000 it had at the time.