Credit Suisse CEO says will need fewer employees after crisis

[NEW YORK] Credit Suisse Group AG will come out of the coronavirus crisis needing fewer employees in the medium term as it faces the prospect of lower growth and looming credit defaults.

Online banking is becoming more important and will lead to a decrease in the importance and number of branches, chief executive officer Thomas Gottstein said in an interview with Swiss newspaper NZZ. Staff could work remotely for 10 per cent to 20 per cent of the time, according to first estimates, and the bank will likely need less office space, he said.

The bank could streamline "many processes," Mr Gottstein said, adding that this is one of his priorities.

Europe's banks are navigating negative interest rates, an oversupply of banking services and uncertainty over client defaults as they chart a return to normality. After a profitable start to the year boosted by a rush of transactions, the outlook for the rest of the year has become more sombre as companies braces for a longer, slower recovery.

In Asia, a soured margin loan to Lu Zhengyao, the billionaire founder of Luckin Coffee, contributed to an increase in Credit Suisse's first-quarter loan-loss provisions, according to people with knowledge of the matter. Still, Mr Gottstein said the business with high-net-worth clients as well as Asia were still growth areas.

Credit Suisse "needs to change something" at its investment banking unit, the smallest division, which has been loss-making for several quarters, Mr Gottstein said without elaborating further.

BLOOMBERG