Credit Suisse is shedding more people. That emerges from today’s release of results for the third quarter. Now the bank is talking about 400 to 450 million “gross savings”.
So far there has been talk of 400 million. The increase that has taken place puts even more pressure on jobs. In the coming months, CS is likely to cut more than the 2,000 jobs previously assumed.
The need to cut costs intensifies after a disappointing quarter. The bank’s pre-tax profit dropped by 30 percent. After taxes, the minus is as much as 38 percent.
A real crash. The background to this is high credit risks.
“In the first nine months of 2020, we booked provisions for credit risks of CHF 958 million, compared to an average over ten years of CHF 126 million,” said CS earlier this morning.
The bank is paying a high price for its research course. The shooting up of provisions on bad loans is the bill for wild lending in the pre-Covid years.
Naturally, the leadership does not want to confirm this. Rather, it explains the steep drop in profits with extra profits from the comparison period of 2019.
At that time, CS made a huge mess with the sale of its fund platform. Now such table silver has become rare, and CS can no longer sell much.
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Magnificent real estate gone, fund platform sold, Six special profit fizzled out.
This is how the deeper problems of CS become visible. They say: The proud bench on Paradeplatz “performs” badly.
You can see that in the total income. They decreased by 2 percent from July to September – and that in the Corona year, in which many global banks took off thanks to trading and government aid.
Conversely, the CS spent more. Plus 5 percent in costs, nobody understands that. Especially not when earnings are pointing down.
The reason lies in the high wages, especially among traders in investment banking. Business is booming there, so the otherwise highly paid Masters of the Universe are gilded even more.
This comes to the fore in the costs: plus 10 percent in 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. The hole was actually even bigger; it could be filled with profits elsewhere.
Presumably it’s the same commodity customer who caused a bang at UBS Switzerland. A week ago, UBS put the write-off at 54 million.
CS Switzerland also sees red in other ways. The division, which has long flourished under Thomas Gottstein, who rose to become CEO, is moving backwards – on all levels: in terms of income, in terms of profit.
The end for subsidiary NAB, the Neue Aargauer Bank, has a negative impact of 41 million. This is how much the integration of NAB into CS and the disappearance of the brand cost.
It looks really bleak at the IWM, where, excluding the special items, profits for the past three months have slumped by almost a third.
The worm is in asset management in particular. The profit had fallen “as a result of investment losses”. It is still 32 million, a decrease of 72 (!)%.
The supposed pearl was naturally badly affected by the loss of the extra profit from the fund deal a year ago.
But there are also surprisingly big problems in that area that needs to be relaunched.
There is also a lack of award-winning properties. “The investment losses were recorded in real estate funds,” writes the bank.
The CS under CEO Gottstein, however, paints a rosy picture.
“Credit Suisse achieved a strong operational performance despite the ongoing effects of the COVID-19 pandemic,” the bank writes in its press release.
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