CREDIT Suisse Group is cutting at least one-third of its investment-banking workforce and about 40 per cent of research staff in China just two months after agreeing to spend US$160 million 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, asking 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 per cent ownership of its local securities venture while wrestling with an exodus of talent and global retrenchment. The bank is still awaiting final approvals to expand its scope of operations in China, more than two years after it gained majority control of its venture.

A Singapore-based Credit Suisse spokesperson declined to comment.

As it awaits approvals to ramp up, Credit Suisse is limited to providing investment banking and equities 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 that started two years ago. Former chief executive officer Thomas Gottstein had vowed to triple the firm’s headcount in China over three years, ramping up its ambitions to gain market share, he said in a panel discussion at the China Development Forum in March 2021.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

China’s regulatory crackdown and Covid Zero policies have triggered an almost 90 per cent drop in overseas stock sales, while mergers have also cratered. The country is on track for its first year of foreign portfolio outflows in more than two decades, possibly amounting to more than US$100 billion this year, according to calculations by Morgan Stanley. That would compare to an inflow of US$200 billion in 2020 to 2021.

Other major banks, including Goldman Sachs Group and HSBC Holdings have also cut China-focused bankers amid the turmoil.

Still, Credit Suisse predicted China and Hong Kong would become the biggest growth market for Asia-Pacific in the next five years, surpassing South-east Asia, Australia and India, regional CEO Edwin Low said in a recent interview with Reuters.

The Swiss lender is undergoing a sweeping overhaul, seeking to shave 2.5 billion francs (S$3.6 billion) off its cost base and cutting about 9,000 positions by 2025 to stem losses from a series of scandals and management missteps. BLOOMBERG