Duncan Mavin is a former Bloomberg Gadfly columnist.

Investors are clear: they want Credit Suisse to seriously scale back its investment bank and fast.

Swiss Slippage
Credit Suisse stock has dropped 64% over the past five years
Source: Bloomberg data

A report Wednesday that the Swiss bank was considering selling all or part of the business to Wells Fargo sent Credit Suisse's shares up about 5 percent. Wells denied the report, which appeared in Hedge Fund Alert, and the stock quickly fell back.

Credit Suisse CEO Tidjane Thiam also rebutted the story Thursday, saying the division remains "core" to its strategy. But he is under pressure to show significant progress in this area soon after the bank announced a fourth-quarter loss of 5.8 billion Swiss francs ($5.8 billion) -- driven partly by a 3.8 billion-franc goodwill writedown at its investment bank. The shares sank to the lowest since 1992.

Investment Banking
Both Credit Suisse's global markets and investment banking operations posted pretax losses in the period
Source: company filings

The biggest concern comes from the global markets division, where revenue from fixed income and equities sales and trading was down more than a third from the previous year.

Revenue Slump
Income from trading stocks and bonds slumped in the fourth quarter
Source: Company filings

Revenue from fixed-income trading fell by more than two thirds -- a much steeper decline than at Deutsche Bank or any of its U.S. peers, according to Bloomberg Intelligence data. Thiam blamed the widening U.S. high yield spreads, subdued client activity and significant mark-to-market losses -- but tough markets weren't unique to Credit Suisse.

Credit Suisse admitted the business's "high and inflexible" cost base remains a problem. Even before the goodwill writedown and other one-off items, global markets swung into a loss of $664 million from a profit of $375 million in the year-earlier period. 

Thiam says he wants to make the fixed-income business less volatile and smaller. He's made some progress on this area by cutting the amount of leverage the bank makes available to clients. But with the market outlook still gloomy in the first few weeks of 2016, it's hard to see much upside from trading businesses any time soon.

Thiam has pledged to reshape Credit Suisse, giving it a greater emphasis on wealth management and a smaller investment bank, as well as focusing on Asia. His long-term strategic decisions shouldn't be affected by the current market turmoil. Still, Credit Suisse's stock reaction over the past two days only adds to pressure on Thiam to deliver a radical overhaul, and soon.

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Duncan Mavin in London at

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