Credit Suisse is cutting 5,500 jobs in 2017 after losing $2.4bn

credit suisse

Credit Suisse posted a £2.44bn Swiss franc (£1.9bn) 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 Independent reports.

The average estimate in a Reuters poll of seven analysts was for a net loss of 2.013bn francs in the quarter.

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,” Mr Thiam said in a statement.

For the fourth quarter, Credit Suisse posted a 2.35bn franc net loss, largely on the back of a roughly $2bn (£1.59bn) 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 chief executive, 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 programmes 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.

At the end of the fourth quarter, Credit Suisse’s common equity Tier 1 capital ratio, an important measure of balance sheet strength, was 11.6 per cent, down from 12 per cent in the third quarter.

Credit Suisse also reaffirmed plans to sell 20-30 percent of its Swiss business in an initial public offering, brushing off talk from some analysts and investors that the bank could reconsider the stake sale. It said a flotation depended on market conditions and board approval.