Credit Suisse Seeks To Cut Costs After A Raft Of Scandals

After a poor performance in the previous quarter, Credit Suisse is exploring additional cost-cutting measures, according to SonntagsZeitung, citing senior sources.

Photo Insert: Credit Suisse has already identified 2022 as a "transition" year in which it hopes to move on from costly scandals that resulted in a near-complete overhaul of top management.

"The numbers are catastrophic," an unnamed senior banker told the publication, adding that employee morale is at an all-time low. Managers and the board of directors are currently debating a new, substantial cost-cutting strategy, a second official told the publication in a piece published on Sunday, according to John Revill, who also wrote for Reuters.

"The cost structure is too large for the bank's revenue potential."

Credit Suisse has already identified 2022 as a "transition" year in which it hopes to move on from costly scandals that resulted in a near-complete overhaul of top management. The changes are being discussed, according to the article, although it is unclear whether they would be publicized when Credit Suisse releases second-quarter earnings on Wednesday.

The bank warned in June that it would lose money for the third quarter in a row. The lender stated at the time that it hoped to intensify cost-cutting measures implemented as part of its reorganization last November.

According to Refinitiv data, analysts anticipate a reported net loss of 398 million Swiss francs ($414.02 million) for the quarter. A spate of costly scandals has damaged Switzerland's second-largest bank, as has the departure of Chairman Antonio Horta-Osorio after he violated COVID-19 quarantine rules.

Among its troubles were a $5.5 billion loss from the bankruptcy of US family firm Archegos Capital Management and the closure of $10 billion in supply chain finance funds.

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