Credit Suisse axes 9,000 jobs as it turns to £3.5bn Saudi-backed funds

Credit Suisse shares have plummeted after the embattled bank said it planned to raise £3.5billion, cut thousands of jobs and shift its focus towards its rich clients from investment banking.Shares in the lender fell 11.2 percent, hitting a two-week low after slumping to record lows recently.Axel P. Lehmann, Chairman of the Board of Directors, said: “Over 166 years, Credit Suisse has built a powerful and respected franchise, but we recognise that in recent years we have become unfocused. For a number of months, the Board of Directors along with the Executive Board has been assessing our future direction and, in doing so, we believe we have left no stone unturned.”Today we are announcing the result of that process – a radical strategy and a clear execution plan to create a stronger, more resilient and more efficient bank with a firm foundation, focused on our clients and their needs.”At the same time, we will remain absolutely focused on driving our cultural transformation, while working on further improving our risk management and control processes across the entire bank. I am convinced that this is the blueprint for success.” Credit Suisse has announced it is cutting jobs (Image: Getty) Visitors enter the Credit Suisse Group AG headquarters in Zurich, Switzerland (Image: Getty) Axel P. Lehmann, chairman at Credit Suisse Group AG, in Washington DC (Image: Getty) Antonio Horta-Osorio (Image: Getty)As part of its restructuring plan, Credit Suisse aims to raise £3.4bn in new capital, £1.2bn of which is expected to come from Saudi National Bank.Credit Suisse also plans to shed the bank’s investment arm, relaunch the CS First Boston brand and wind down some of higher-risk businesses.Its workforce will be cut from 52,000 to 43,000 by the end of 2025. A total of 2,700 jobs are to go before the end of this year.Swizterland based Credit Suisse has a major hub in London, employing 5,500 people in Britain.Analysts at Jefferies said in a note: “Given the significant uncertainty and execution risk we continue to see a better risk/reward elsewhere, especially as peers are also trading at low multiples.”DON’T MISS: Putin’s ‘goddaughter’ narrowly escapes arrest over anti-war videos [REPORT] Russia blow as US Army officer pinpoints Ukraine move for Crimea [REVEALED] ‘It’s always the Left which stoops to disgusting abusive language’ [OPINION] Britain’s richest (Image: Express)The pan-European STOXX 600 index slipped 0.5 percent after closing at a five-week high on Wednesday amid expectations major central banks will slow the pace of monetary policy tightening.Eyes have been on the European Central Bank (ECB) with policymakers widely expected to hike interest rates by 75 basis points (bps).The bank is also likely to take the first steps in reducing its £7.6trillion (8.8tn euro) balance sheet, bloated by years of debt purchases and ultra cheap loans extended to banks.News of the restructuring comes after Bloomberg News reported on Sunday that Chief Compliance Officer Rafael Lopez was set to leave the bank after spending little more than a year in post. A view of Credit Suisse in Canary Wharf (Image: Getty)Switzerland’s second largest bank is trying to recover from a series of scandals.A spying scandal forced then-CEO Tidjane Thiam to quit in 2020. Switzerland’s financial regulator said Credit Suisse had misled it about the scale of its surveillance.Mr Thiam’s successor Thomas Gottstein lasted until July this year when Credit Suisse turned to restructuring expert Ulrich Koerner as CEO and launched a second strategic review within 12 months.Mr Lehmann took over in January from Antonio Horta-Osorio, who resigned over breaking quarantine rules during the COVID-19 pandemic less than nine months after joining.Last week, it sold an 8.6 percent stake in Allfunds Group for £290mn (334mn euros). It also sold a 30 percent stake in Energy Infrastructure Partners for an undisclosed price.Other assets reported to be up for sale include a stake in the SIX Group, which runs the Zurich stock exchange, two specialist Swiss banks, Pfandbriefbank and Bank-Now, and Swisscard, a joint venture with American Express.Credit Suisse is also looking to sell the Savoy Hotel in central Zurich The lender is reported to have hired Morgan Stanley and Royal Bank of Canada to help organise a capital increase to underpin its finances and secure funds for restructuring.A convertible bond issue is another avenue the Swiss bank is said to be considering to help finance its turnaround plans. This could allow the bank to limit the sale of shares at depressed current prices. As a last resort, Credit Suisse could seek state aid.