World Economy

Credit Suisse Eyes $2b Costs

Credit Suisse Eyes $2b CostsCredit Suisse Eyes $2b Costs

Swiss bank Credit Suisse could cut up to 2 billion Swiss francs ($2.08 billion) in costs as part of a revamp that new Chief Executive Tidjane Thiam will announce this month, the Schweiz am Sonntag paper reported.

Without naming its sources, the Sunday paper said heads of big departments had been told to slash spending by 7 to 10%, which extrapolated to the group would mean savings of 1.5 billion to 2 billion francs.

“This is the order of magnitude that you have to be prepared for,” it quoted an unidentified senior executive as saying.

The bank’s administrative costs have risen in the past three years and stood at 22.4 billion francs in 2014, while rival UBS has cut costs by nearly 2 billion over the past two years, it noted.

With 17,500 staff, Switzerland accounts for around 45% of costs at Credit Suisse. This could prompt Thiam to shift expensive back-office operations like information technology to less costly regions, the paper said.

A spokeswoman said Credit Suisse does not comment on media speculation and would present its new strategy on Oct. 21.

Unconfirmed media reports suggest the bank plans a substantial capital increase via a share sale that could raise up to 8 billion francs.

Since taking charge of Credit Suisse in July, Thiam has signalled a desire to focus on banking for the world’s wealthy, particularly in Asia, amid talk of a need to raise cash to improve its capital position