FAST FIVE: Credit Suisse, Wells Fargo To Cut 'Hundreds Of Jobs' As Shares Slump
Given that the Swiss bank's shares have fallen 40% since CEO Tidjane Thiam took over Credit Suisse three-and-a-half years ago, the fact that he has managed to hang on is a small miracle.
But with shareholders growing ever more anxious as CS's shares have slumped nearly 30% YTD, the embattled CEO is now taking a page out of Wells Fargo's book and resorting to a tried-and-true strategy for boosting profits: Staff cuts.
Amazingly, while the bank's struggling trading business won't be effected, the cuts could come from its International Wealth Management and Swiss Universal Bank businesses, which have historically been money-makers for the bank.
Thiam's decision to raise billions of francs in capital by offering new shares hasn't helped the banks' shares, and the volpocalypse blowup that killed XIV (which CS created) in February stoked fears of lawsuit-related payouts (despite being the largest shareholder of the ETN, the bank has insisted that it had been 'completely hedged').
But Thiam, who has cut some $4 billion of costs since the bank's “restructuring” began in 2015, will still need to explain to investors next month how he plans to boost revenues as his pivot to emerging markets and wealth management has produced only tepid returns.