Credit Suisse Group AG (CSGN)’s decision to exit the commodities-trading business will probably result in about half of the unit’s 80 workers globally being cut, people briefed on the matter said.
Some employees will remain in different roles while others will work on winding down the business, said one of the people, who requested anonymity because the figures aren’t public. The cuts won’t be immediate as the Zurich-based bank transfers the commodities book into its non-strategic unit, the person said.
Chief Executive Officer Brady Dougan has reduced the amount of capital dedicated to the trading business as investors have called for Credit Suisse to shrink its investment bank and focus on wealth management. The firm cited low volatility and client volumes in its decision to exit commodities trading and said the move will reduce costs by about $75 million and lower risk-weighted assets and leverage exposure by $2 billion and $5 billion, respectively.
Dougan, 54, said the commodities-trading business was losing money this year. Credit Suisse may keep small parts of the business, such as precious metals, and move them to the foreign-exchange unit, he said. The bank is keeping its commodity trade finance business, which is part of the corporate and institutional clients division.
Credit Suisse is also cutting expenses at its foreign-exchange and rates businesses by shifting more of those trades to its electronic platform, Chief Financial Officer David Mathers said on a conference call with reporters today.
To contact the editors responsible for this story: Peter Eichenbaum at email@example.com Steven Crabill, Dan Kraut