Credit Suisse AG CS intends to slash up to 500 jobs, as well as shut down about a quarter of its branches in Switzerland, per Reuters. The move comes amid the bank’s focus on enhancing its digital-banking capabilities and reducing annual costs.
The latest initiative is likely to save about $110 million in annual costs. Also, Credit Suisse’s subsidiary — Neue Aargauer Bank — will be merged with the overall Credit Suisse brand. Notably, the bank’s actions follow the larger savings package unveiled in July, under which about $440 million is expected as cost savings.
In a statement, the bank said, "The changes to Credit Suisse's branch network across Switzerland, including branches in Canton Aargau, are expected to be implemented by the end of 2020.”
Apart from cost savings, Credit Suisse’s enhanced focus on bolstering its digital capabilities is aimed at attracting younger clients. In this regard, the bank will also unveil a new digital offering in October 2020. Moreover, the bank will be unveiling its digital plans and branch strategies in September.
However, the job cuts have not gone down well with the Swiss Bank Employees Union. The union has criticized Credit Suisse’s move by remarking that it will cause distress among employees who will lose their jobs amid the current global economic uncertainties. Also, the bank’s decent financial results do not support layoffs.
Nevertheless, management reassured that its focus on digital banking will add further positions and new roles, particularly in the affected regions.
Shares of this Zacks Rank #2 (Buy) company have depreciated marginally over the past year, while its industry has declined 19.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The coronavirus pandemic has compelled a number of banks to consider job cuts in order to brave through the economic slowdown. Among others, Commerzbank AG CRZBY is planning to trim in excess of 7,000 jobs. NatWest Group NWG, is likely to slash more than 500 jobs in its retail business, along with a closure of one office, in London. Moreover, the banking arm of Mitsubishi UFJ Financial Group MUFG intends to reduce its staff by an additional 2,000 jobs by fiscal 2023.
(We are reissuing this article to correct a mistake. The original article, issued on August 26, 2020, should no longer be relied upon.)
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