Credit Suisse is in the middle of a second major overhaul within two years.
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Credit Suisse,
Switzerland’s second-biggest bank, reported a fifth consecutive quarterly loss and predicted its investment bank and wealth management businesses will continue to suffer.
Shares were down 4% in early trading in Zurich. The past year, the stock has dropped more than 60%. The bank lost 1.4 billion Swiss francs ($1.5 billion) in the fourth quarter. For the full year of 2022, the bank reported a loss of 7.3 billion Swiss francs ($8 billion), roughly in line with expectations.
The results show Credit Suisse is still reeling from a series of setbacks and scandals during the past few years that included a huge hit from the collapse of family office Archegos Capital and a rapid succession of leaders. The company is in the middle of an overhaul, and CEO Ulrich Koerner says the changes are being implemented “at pace.”
In its second strategic revamp in two years, the bank is cutting 9,000 jobs, spinning out its deal-making unit, and refocusing on wealth management.
The loss in the fourth quarter was led by the investment bank and Credit Suisse said it expects another one in the unit in the first quarter. It also expects the wealth management division to lose money in the first three months of the year.
As part of separating the investment bank, Credit Suisse said it bought M. Klein & Co., the boutique outfit led by former Citigroup banker Michael Klein, for $175 million. Klein will continue to lead the unit, as well as the spinout CS First Boston.
In another sign of investment banks having a hard time, Bloomberg reported yesterday that
JPMorgan Chase
is cutting hundreds of jobs in its mortgage business this week. JPMorgan didn’t immediately respond to a request for comment from Barron’s early on Thursday.
Write to Brian Swint at brian.swint@barrons.com
Credit: marketwatch.com