Credit Suisse to cut costs further

Credit Suisse announced on Wedsneday more than CHF1 billion ($991 million) in extra cost cuts, as Chief Executive Tidjane Thiam looks to compensate for challenging conditions which have hampered his restructuring of the lender as Reuters report.

In a statement ahead of its investor day, the bank lowered its operating cost base target for 2018 to below 17 billion francs from below 18 billion francs. It also increased planned net cost savings target to greater than 4.2 billion francs by end-2018 from 3.2 billion.

As expected, Credit Suisse lowered 2018 pre-tax income targets for its Asia Pacific and International Wealth Management divisions to 1.6 billion and 1.8 billion francs respectively. The previous target for both divisions was 2.1 billion francs.

It confirmed a 2018 target of 2.3 billion francs at its Swiss business, which it plans to partially list next year.

“Given the unsupportive market conditions we are facing, the realization of our profit objectives plan is now more geared to the delivery of cost reductions, over which we have greater control than revenue growth,” the bank said in the statement. “This also leaves us with potential upside, should market conditions improve.”

Just over a year since Thiam laid out his strategy for Switzerland’s second-biggest bank, analysts had been in anticipation of another axe to costs and a pare back of the profit targets, which had been perceived as too optimistic.

As noted, Thiam has already deepened job cuts once following unexpected losses in the global markets unit, bringing the total headcount reduction across the bank to 6,000 this year.