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Credit Suisse has announced it is cutting 4,000 jobs to boost its cost-cutting programme after the Swiss lender reported a CHF2.44bn (£1.66bn, €2.18bn, $2.43bn) full-year loss on Thursday (4 February). The bank's effort in cutting costs could not prevent it from posting its first loss since 2008.
Apart from Credit Suisse employees, contractors and consultants face the axe as part of newly appointed chief executive Tidjane Thiam's cost-saving measures. The bank has already completed CHF1.2bn in cost savings, representing more than a third of the CHF3.5bn spending cuts promised by 2018.
"Given the particularly challenging environment we face, we decided in the fourth quarter to accelerate the implementation of our cost-savings programme across the bank," Thiam said. The spending cuts were announced in October 2015 after Credit Suisse identified volatility in the markets.
The chief executive, who joined Credit Suisse from insurance giant Prudential in July 2015, said that falling oil prices also contributed to the challenges faced by the Swiss finance giant. The bank struggled to deal with uncertainty surrounding the growth of emerging markets and the strength of the Swiss franc.
The boost in spending cuts to increase margins could not prevent the lender's share price to plummet by more than 9% on Thursday morning. The bank's loss was 16.7% more than the expected at CHF2.09bn.
"We continue to believe that wealth management, supported by our investment banking capabilities, remains a uniquely attractive long-term opportunity for our bank, as we are well positioned to create value for our customers, individual and institutional, across our chosen markets," Thiam told shareholders. "Therefore we will continue to implement our strategy with discipline."
The favourable returns on wealth management caused Thiam to push that arm of Credit Suisse, at the expense of the investment banking division, which the bank is to scale down. Investment banking profits dropped by 90% compared with 2014.