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Credit Suisse is getting rid of more people. That comes from today’s release of third quarter results. Now the bank speaks of between 400 and 450 million of “gross savings”.
So far there has been talk of 400 million. The increase that has occurred is putting even more pressure on jobs. In the coming months, CS is likely to cut more than 2,000 previously assumed jobs.
The need to cut costs intensifies after a disappointing quarter. The bank’s pre-tax earnings were down 30 percent. After taxes, the minus is up to 38 percent.
A real shock. The background to this is high credit risks.
“In the first nine months of 2020, we recorded provisions for credit risks of 958 million Swiss francs, compared to a ten-year average of 126 million Swiss francs,” CS said this morning.
The bank is paying a high price for its research course. The rise in bad loan provisions is the bill for wild loans in the pre-Covid years.
Naturally, the management does not want to confirm it. Rather, it explains the sharp drop in earnings with additional earnings from the 2019 comparison period.
At that time CS made a proud rubble with the sale of its fund platform. Now those cutlery have become rare and CS can’t sell much anymore.
Splendid real estate disappeared, fund platform sold, Six special benefits vanished.
In this way, the underlying problems of the CS come to the surface in a visible way. They say: The proud Paradeplatz bench “works” badly.
You can see that in the total revenue. They fell 2 percent from July to September, and that’s in the Corona year, in which many global banks took off thanks to trade and government aid.
On the contrary, the CS spent more. Plus 5 percent of the costs, nobody gets it. Especially not when profits are heading down.
The reason lies in the high salaries, especially among investment banking operators. Business is booming there, so the otherwise highly paid Masters of the Universe are even more golden.
This comes to the fore in costs: plus 10 percent at the investment bank.
CS Switzerland also crashed. Wherever the bank has reported new dream results in recent years, there is a huge loss with a single customer.
52 million copyists. Actually, the hole was even bigger, it could be filled with profit elsewhere.
Presumably the same commodity customer that caused a setback at UBS Switzerland. A week ago, UBS postponed the cancellation by 54 million.
CS Switzerland sees red in other ways too. The division, which has long flourished with Thomas Gottstein, who became CEO, is backing down, at all levels: in terms of revenue, in terms of profits.
The end of the NAB subsidiary, the Neue Aargauer Bank, has a negative impact of 41 million. This is the cost of NAB’s integration into CS and the demise of the brand.
It looks really bleak on the IWM, where, excluding specials, earnings for the past three months have plummeted by almost a third.
The worm is in asset management in particular. The profit had fallen “as a result of investment losses.” It’s still 32 million, a decrease of 72 (!)%.
Naturally, the so-called pearl was hit hard by the loss of extra earnings from the fund’s operation a year ago.
But there are also surprisingly big problems in that area that need to be relaunched.
There is also a lack of award-winning properties. “Investment losses were recorded in real estate funds,” the bank writes.
However, the CS under CEO Gottstein paints an optimistic picture.
“Credit Suisse has achieved strong operating performance despite the continuing effects of the COVID-19 pandemic,” the bank writes in its press release.
