Credit Suisse Posts $2.4 Billion Loss, to Cut 5,500 Jobs

Credit Suisse posted a 2.44 billion Swiss franc ($2.43 billion) net loss for 2016, its second straight year in the red, keeping pressure on Chief Executive Tidjane Thiam to deliver on his turnaround plan for Switzerland’s second-biggest bank.

The average estimate in a Reuters poll of seven analysts was for a net loss of 2.013 billion francs in the quarter, Foxbusiness reported.

Zurich-based Credit Suisse also said it will cut its headcount by a net 5,500 jobs in 2017 after 7,250 layoffs in 2016, as it works toward its 2018 cost-cutting target. The bank did not specify where the extra cuts would be.

“We believe we are well positioned to continue to make progress with our restructuring program in 2017 and 2018,” Thiam said in a statement.

For the fourth quarter, Credit Suisse posted a 2.35 billion franc net loss, largely on the back of a roughly $2 billion charge to settle US claims the bank misled investors in the sale of residential mortgage-backed securities.

The average estimate in the Reuters poll was for a quarterly net loss of 2.01 billion francs.

Nevertheless, Credit Suisse proposed an unchanged dividend of 0.70 francs per share, in line with market expectations.

Just over 18 months into his time as CEO, Thiam has refocused Credit Suisse more toward wealth management and less on investment banking.

In wealth management, Credit Suisse said it suffered net outflows in the fourth quarter due to clients pulling cash to participate in tax amnesty programs and a decision to no longer bank certain external asset managers.

The bank said all its wealth management divisions had seen positive inflows year to date.