Credit Suisse joins the queue of banks offering up restructuring plans. New chief executive Tidjane Thiam wants to raise 6 billion Swiss francs ($6.3 billion) to underpin its biggest overhaul in almost a decade. Hayley Platt reports.
It's the second European bank this week to announce a major restructuring. Following Deutsche Bank's radical plans, Credit Suisse plans a complete overhaul for its business. Just four months into the job, boss Tidjane Thiam wants to raise more than $6 billion from a share offering and shrink the bank's investment business. Its shares were down over 4 per cent on the news. Admiral Markets Darren Sinden. (SOUNDBITE) (English) MARKET ANALYST, ADMIRAL MARKETS, DARREN SINDEN, SAYING: "Earnings from the investment bank are volatile and therefore shareholders would like the management of the company to try and right size that part of the business and try and get earnings on an even keel a steady earnings growth rather than the peaks and troughs that has been historically associated with investment banking." Thiam also announced changes to top management and says he'll float shares in its domestic Swiss business. Sixteen hundred staff are to go there - and there'll be other staff reductions in its investment bank in London. In all, it wants to cut gross costs by 3.5 billion francs by the end of 2018. And to put more focus on looking after the fortunes of the world's wealthy, especially in emerging markets. (SOUNDBITE) (English) MARKET ANALYST, ADMIRAL MARKETS, DARREN SINDEN, SAYING: "To try and become more capital efficient must always be a good idea and to reduce headcount where possible. I'm not sure I would buy into the idea that moving people back to Switzerland will reduce costs. I think probably it's as expensive to do business in Switzerland if not more so than it is in London." As for the third-quarter results that came with the announcement: pretax income fell 34 percent to 861 million francs on the year before. Thiam described them as "not very good".