Credit Suisse posts first annual loss since 2008

The bank posted a 2015 net loss of 2.94 billion Swiss francs (2 billion pound), worse than the median estimate of a 2.12 billion loss in a Reuters poll.

Most of those adjustments are due to the 2000 purchase of the USA investment bank Donaldson, Lufkin & Jenrett (DLJ), as Credit Suisse announced on Thursday. Last year, Credit Suisse announced it would be cutting jobs, including 1,600 in Switzerland, in an effort to save CHF6 billion in capital by selling stock and cutting CHF3.5 billion in costs.

Late past year, Mr Thiam outlined plans for staff reductions but Credit Suisse had not specified the number.

It said it had accelerated its cost savings program so that it had taken action on 34 percent of the measures planned by 2018, or 1.2 billion of the targeted 3.5 billion francs. The investment bank’s consulting segment also reported profit declines. Those plans include bolstering wealth management, particularly in regions such as Asia, while reducing the resources it directs to its investment bank.

If not for those factors, Credit Suisse would have ended the year in the black, with a CHF4.2 billion profit gain.

The bank reversed into a pre-tax loss for its Asia-Pacific operations in its fourth quarter compared to a year ago, stung by a one-off goodwill impairment that reflected global restructuring in the investment banking division.

Thiam said: “A combination of uncertainties on Chinese growth, the abrupt drop in oil prices, large industry mutual fund redemptions of financial assets, asynchronous policies by leading central banks, lower liquidity, a strong Swiss franc have all contributed to making the fourth quarter of 2015 challenging with lower levels of client activity, lower levels of issuance and material shifts in the prices of some asset classes”.

He said Thursday the bank was accelerating that process and were targeting 500 million francs in cost-savings per year, and would rapidly be letting some 4,000 employees go. Net asset outflows at the unit’s private banking business totaled 2.9 billion francs.

Credit Suisse shares tumbled on Thursday after the bank posted its first annual loss since 2008.