The Zurich-based lender is slashing about 25 investment banking jobs and 10 of its research staff in China this week, after finishing a round of cuts in the region earlier this month, sources say. – Reuters
SHANGHAI: Credit Suisse Group AG is cutting at least one-third of its investment banking workforce and about 40% of research staff in China.
This comes just two months after it agreed to spend US$160mil (RM732mil) to take full control of its securities business in the world’s second largest economy.
The Zurich-based lender is slashing about 25 investment banking jobs and 10 of its research staff in China this week, after finishing a round of cuts in the region earlier this month, according to people familiar with the matter, who asked not to be identified because the information isn’t public.
The moves are part of a global reduction of 2,700 jobs planned for the fourth quarter.
Credit Suisse’s biggest round of job cuts in China comes at an awkward time for the firm, which is seeking approval to take 100% ownership of its local securities venture while wrestling with an exodus of talent and global retrenchment.
The bank is still awaiting final approval to expand its scope of operations in China, more than two years after gaining majority control of its venture.
A Singapore-based Credit Suisse spokeswoman declined to comment.
As it awaits approval to ramp up, Credit Suisse is limited to providing investment banking and equity trading services in southern China.
It’s now cutting its research staff while awaiting approval from the regulator to provide the service onshore.
The job cuts reverse a hiring spree started two years ago. In a panel discussion at the China Development Forum in March 2021, former chief executive officer Thomas Gottstein vowed to triple the firm’s headcount in China over three years, increasing its ambitions to gain market share.
China’s regulatory crackdown and Zero-Covid policies have triggered an almost 90% drop in overseas stock sales, while mergers have also cratered.
According to Morgan Stanley’s calculations, the country is on track for its first year of foreign portfolio outflows in more than two decades, possibly amounting to more than US$100bil (RM457bil) this year. This compares to an inflow of US$200bil (RM915bil) between 2020 and 2021.
Other major banks, including Goldman Sachs Group Inc and HSBC Holdings Plc have also cut China-focused bankers amid the turmoil. — Bloomberg
