Credit Suisse has joined the ranks of Deutsche Bank and Standard Chartered, two other global banking institution that have opted to scale back their operations in a cost-cutting strategy.
Late last month, Deutsche Bank convulsed its investors after it reported that it was embarking on a rigorous house cleaning operation that will see the loss of 35,000 jobs by 2020. Moreover, during the next two years alone, the bank revealed its intention to shed assets in excess of $4.4 billion along with a staggering 20,000 jobs over this period.
Just one week later, Standard Chartered announced that it would cut approximately 15,000 jobs to help jump-start its retail transformation strategy. This news came amidst a dismal Q3 2015 revenues report that yielded an unexpected -$139 million loss.
Moving to Credit Suisse, the job cuts are far less staunch when weighed with its industry counterparts, however, the first round of cuts are taking place today in London, namely across the group’s fixed income unit. As such, the fixed income rates and foreign Exchange (FX) business will see the loss of 100 jobs, part of a broader stroke that will see 2,000 jobs eliminated in London alone.
Credit Suisse cited ‘office efficiency’ with regards to its round of cuts, which also will entail nearly 1,800 back office jobs. Arguably the biggest impetus behind these cuts has been the relinquishing of its position as the primary dealer in the European government bond market. Credit Suisse had previously been acting as a de-facto leader in government bonds, which had allowed banks to take part in auctions whilst serving as an entree to more lucrative work in debt syndications.
However, this hold has since softened, helped by disruptive Regulation that has eroded the profitability of banks given the need to shoulder heavier capital reserves to safeguard against losses.
Despite the lean strategy afflicting its European operations however, Credit Suisse has affirmed its commitment and focus on the US credit market. Indeed, the bank is slated to retain its primary dealership across US Treasuries, while no cuts are scheduled for its US business at this time.
