• Gottstein is reportedly considering slashing jobs at the bank’s domestic branch network
  • Up to 120 bank branches may be trimmed in size.
  • In the March quarter the bank set aside a loan loss provision of $603 million

Swiss banking giant Credit Suisse Group (CS) is reportedly seeking to cut hundreds of jobs as a way of reaching profit targets, according to Swiss newspaper SonntagsZeitung.

Chief Executive Officer Thomas Gottstein is reportedly considering slashing jobs at the bank’s domestic branch network after the covid-19 pandemic provided a large boost to its online operations.

Up to 120 bank branches may be trimmed in size.

Earlier this year, Gottstein warned: "Online banking has received a boost, for example in payment transactions. The importance and thus the number of branches will therefore continue to decline."

The Swiss newspaper also reported that Gottstein may nix a plan by his predecessor, Tidjane Thiam, to divide Credit Suisse’s investment bank into a global markets division and an investment banking and capital markets unit. Instead, by merging the investment bank’s operations, job cuts can be made more easily.

Gottstein may also merge the lender’s risk and compliance segments.

“On an ongoing basis, we consider a broad range of options to identify ways to further improve how we serve our clients,” the bank told Bloomberg. “We are in a constant dialogue on these topics with our investors.”

Late last week, the Swiss banking blog Inside Paradeplatz speculated that Gottstein wants to reduce the bank’s overall number of units from five to three.

Credit Suisse shares have dropped 25% this year, almost three times worse than the performance of its principal rival UBS Group AG (UBS).

In late April, Credit Suisse said net income for the quarter ended in March surged by 75% from the year-ago quarter to $1.34 billion, but the bank set aside a loan loss provision of 568 million Swiss francs [about $603 million] in connection with the covid-19 pandemic.

“The scale of the adverse economic impact of the Covid-19 crisis is still difficult to assess and we would caution that we may also see further reserves build and impairments in the coming quarters, particularly in our corporate bank and other loans, outside Switzerland, as well as from our investments in asset management,” the bank said at the time. reported on Monday that some analysts are concerned about Credit Suisse’s finances if the pandemic worsens.

Analysts at brokerage Kepler Chevreux of Paris cited, among other things, that Credit Suisse has one of the weakest capital positions among European banks. In its March quarterly report, the bank warned that it expected its Tier 1 ratio – the ratio of its equity capital and disclosed reserves to its total risk-weighted assets -- to drop to 11.5% by the end of the year from 12.7% at the end of 2019.

Credit Suisse's book value per share is also at a record low of 0.5%. also reported that the pandemic will negatively impact Credit Suisse's second-quarter results, particularly its revenues.