The bank said the job cuts – which come on top of the 4,000 previously announced – would reduce costs in the troubled division from $6.6bn to $5.4bn by the end of 2018. So far 2,800 roles have been made redundant, reports CityAM.
Credit Suisse’s share price was up 2.1 per cent in early trading on the news.
The division will be forced to make further write-downs in the first quarter of this year – $346m (£244m) as of 11 March 11, resulting in a loss for the period, although this will be lower than last quarter, when it was forced to write down $633m.
The bank is “exiting activities that are not consistent with our new strategy”, which focuses on equities, credit and solution, which will be made up of derivatives and emerging markets. Distressed credit, European securitised product trading and long-term illiquid funding are being exited.
The move comes as Credit Suisse admitted trading had been “weak” in the first quarter, with revenues expected to decline as much as 45 per cent.
Chief executive Tidjane Thiam said the firm had “reassessed our portfolio of business” in light of continued challenges and the new look global markets division would “consume less capital and produce more stable earnings with a more fee-based, client-driven model”.
Group wide, Credit Suisse now believes it can meet a gross savings target of CHF 1.7bn (£1.2bn) for 2016 and CHF 1.4bn on a net basis, resulting in an operating cost base of CHF 19.8bn in 2016.
On top of this, the bank is pledging to have made CHF4.3bn savings by 2018, up from the original CHF3.5bn estimated, with an absolute cost base below CHF 18bn.
It is also reducing its risk-weighted assets from $83bn to $60bn by the end of this year, and its leverage target has been lowered from $380bn to $290bn.
Thiam said: “Our capital position remains strong in spite of challenging market conditions. The cost savings underway and the continued restructuring of global markets will contribute to making our capital position more resilient. In addition, we plan to execute asset and business sales of more than CHF 1bn in 2016. We will also adjust our growth investments, keeping up to CHF 1bn of the announced CHF 1.5bn growth investment spend discretionary.
“With these actions, we aim to operate between 11 per cent and 12 per cent look-through CET1 ratio in 2016 in challenging conditions.”
“Our efforts aim at putting Credit Suisse in a position to generate capital and grow profitably in the medium and long term. The measures we are taking to strengthen our capital base and reduce our operating costs will improve our resilience and flexibility going forward.”