(Bloomberg) — Credit Suisse Group AG became the latest European securities firm to overhaul its trading and advisory units after a bigger-than-estimated revenue drop compounded pressure from regulators to increase buffers against potential losses.
The Zurich-based lender will separate trading from its underwriting and advisory businesses and eliminate as many as 2,000 positions in London as it boosts its focus on Switzerland and wealth management, according to statements Wednesday. The division will be run by Tim O'Hara, Jim Amine and Helman Sitohang, with Gael de Boissard, 47, and Robert Shafir, 57, leaving the executive board as part of a wider management overhaul.
Chief Executive Officer Tidjane Thiam joins counterparts at Deutsche Bank AG, Barclays Plc and UBS Group AG in pulling back from some trading operations as regulators force them to increase the amount of funds they hold as protection against possible losses. Pressure from lawmakers has dovetailed with volatility in global markets, as investors hold back from buying and selling assets amid concern about a slump in the price of oil, the outlook for higher interest rates in the U.S. and the strength of the Chinese economy.
Cryan's Overhaul
"European banks that split up their investment banks give me the impression that they're telling the market that they have one business they plan to invest in, and one which is going to shrink or could later be sold or merged," said Lutz Roehmeyer, who helps manage 11 billion euros ($12.5 billion) at LBB Invest in Berlin.
The bank also distributed the responsibilities of running the investment bank to three people. O'Hara, 51, an equities banker, will lead sales and trading in the Americas and Europe, Middle East and Africa, while Amine, 56, will take over advisory and underwriting in those regions.
Credit Suisse also named Sitohang and Iqbal Khan among six new board members to reflect the shift in focus, with Hans-Ulrich Meister stepping down. Sitohang, 49, will run the entire investment bank and private bank in Asia.
Thiam's restructuring comes days after Deutsche Bank co-CEO John Cryan split the Frankfurt-based lender's corporate banking and securities unit. Some of the bank's most senior executives departed in a management overhaul including Colin Fan, the co- head of the investment banking and trading unit.
