Credit Suisse Group AG plans to cut 5,000 jobs

Swiss bank Credit Suisse plans to cut around 5,000 jobs across the group as part of a cost-cutting initiative.

A source told Reuters the number of cuts could still change as discussions are ongoing.

The bank declined to comment beyond its earlier statement that it would provide an update to its full strategy review with its third-quarter earnings report, and said any potential earnings reports before that date should be treated as speculative.

As part of Credit Suisse’s recovery from a series of scandals and losses, Ulrich Koerner was named its new chief executive in July, tasked with overseeing a reduction in the investment bank and cutting costs by more than a billion dollars.

Koerner took over from Thomas Gottstein in August after two tumultuous years that included huge losses, a rare Swiss court conviction and a 40% drop in the bank’s share price.

In addition to a $5.5bn loss on the default of US hedge fund Archegos, the bank also suffered a $10bn loss on supply chain finance funds linked to the collapse by Greensill.

In June, the first criminal trial by one of Switzerland’s major banks took place against Credit Suisse for failing to prevent money laundering by a Bulgarian gang of cocaine smugglers, although the conviction is subject to of a call.

With a management change and restructuring aimed at further shrinking investment banking and bolstering its flagship wealth management business, Switzerland’s second-largest bank is calling 2022 its “transition” year.

As part of its second strategic review in less than a year, the bank said it would assess options for its securitized products business to attract third-party capital.

In the medium term, Credit Suisse intends to cut costs below 15.50 billion Swiss francs ($15.8 billion), from an annualized 16.8 billion Swiss francs this year.

A sell-off in the banking sector sent shares of Credit Suisse down 3.9%, which have fallen more than 40% this year.

The stock rose 2.22% to CHF 4.97.