Credit Suisse CEO expects mid-term headcount reduction in post-COVID adjustment: NZZ

 Credit Suisse CEO expects mid-term headcount reduction in post-COVID adjustment: NZZ
imageEconomy20 hours ago (May 23, 2020 12:15AM ET)

(C) Reuters. FILE PHOTO: Gottstein, designated new CEO of Swiss bank Credit Suisse attends an interview in Zurich

ZURICH (Reuters) – Credit Suisse (S:CSGN) expects to get by with fewer staff in coming years as automation kicks off, Chief Executive Thomas Gottstein told Swiss newspaper NZZ, and as the bank positions itself toward more digital interactions and remote working in the post-COVID-19 world.

“Medium-term, we will certainly be able to get by with fewer staff – primarily, as we continue to automate business,” Gottstein said in the interview, published on Saturday. “Many processes can still be streamlined. That is one of my priorities. But we also want to grow, especially in our business with very wealthy clients and in our Asian business.”

Gottstein, the former head of Credit Suisse’s Swiss business, who became CEO in February, does not expect Credit Suisse to post a loss this year, even as he expects higher credit losses for the bank’s Swiss and international business in the next six to 12 months on global fallout of the coronavirus pandemic than the bank has seen over the past five years.

“I’m convinced we will absorb (these losses) and are correctly positioned from a strategic standpoint,” he said, noting the bank’s return on tangible equity in the first quarter had exceeded its full-year target.

Gottstein expects employees to spend 10%-20% of their time working from home in the future, he told the newspaper, leading to savings on office space.

The bank will also benefit from a reduction in travel, as video conferencing takes off, he said, and in the future will operate fewer branches, as online banking receives a lasting boost following coronavirus lockdowns.

“As universal banks, we can learn a great deal from (digital providers such as Revolut and N26), especially when it comes to offering customers services via digital channels in the simplest, quickest and most convenient way possible,” Gottstein said. “In the coming months, we will respond to these new competitors with various offerings.”

Under Gottstein’s predecessor, Tidjane Thiam, Switzerland’s second-biggest bank had repositioned itself to focus on wealth management while whittling down its investment bank.

Gottstein now sees “optimisation potential” within Credit Suisse’s investment banking and capital markets division, which has posted consecutive losses over recent quarters, but maintained the necessity of keeping the business.

Credit Suisse CEO expects mid-term headcount reduction in post-COVID adjustment: NZZ

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