And the banking layoffs have begun…
Credit Suisse is leading the charge, revealing this week that the investment bank will need less employees on the other side of the coronavirus crisis as a result of lower growth and looming credit defaults.
The popularity of online banking has also reduced the need for branches, CEO Thomas Gottstein said. The company’s staff could work remotely for 10% to 20% of the time and the bank also anticipates needing less office space, Gottstein predicted, according to the Business Times.
The bank is looking at streamlining “many processes,” he said, likely trying to come up with a nice way to say “we’re firing every single non-essential worker in the middle of a global pandemic that we can find.”
Meanwhile banks in Europe are pre-occupied with dealing with a NIRP environment, an oversupply of banking services and looming uncertainty on client loans as a result of the global economy grinding to a halt. What was once an optimistic outlook for the sector for the year has now become a focus on a long and tedious road to post-pandemic recovery.
A margin loan provided to the billionaire founder of Luckin Coffee helped exacerbate the company’s Q1 loan loss provisions, yet Gottstein says high net worth business in Asia remains an area for growth.
Gottstein also said the bank “needs to change something” at its investment banking unit, which has been generating losses for several quarters.
Our guess is that the something that needs to change is the division’s number of employees.