As part of its restructuring efforts to reduce costs, Credit Suisse Group AG CS is planning to relocate around 40 traders and 60 back-office staff from London to Dublin, which the company is eyeing to make its key center for servicing hedge funds in Europe. The news was first reported by Bloomberg.
The move comes after Credit Suisse received regulatory approval to set up a branch in Ireland. The company plans to shift prime brokerage, prime financing and securities-lending operations to Dublin to capitalize on the operating efficiencies in the Irish capital.
The Swiss banking giant’s Chief Executive Officer (CEO) Tidjane Thiam plans to sell its U.S. private bank and reduce its prime brokerage and fixed-income business in an attempt to cutback costs, boost returns for shareholders and meet stricter capital requirements. The CEO is expected to layoff around 2,000 positions in London.
Thiam, the former CEO of U.K.-based insurer Prudential plc PUK, who joined Credit Suisse in July succeeding Brady Dougan, intends to enhance the bank’s wealth management services, focused on the world’s wealthy, particularly in Asia, while retreating from riskier securities activities.
In an e-mail statement to Bloomberg, Sofia Rehman, a Credit Suisse spokeswoman said, “The Zurich-based lender plans to relocate prime brokerage, prime financing and securities-lending operations to Dublin after receiving approval from the nation’s central bank to establish a local branch.”
The Irish capital “will become the primary hub for prime services business within Europe,” Rehman said. “Dublin offers an attractive operating environment for our business from the perspective of talent pool, infrastructure and efficiencies.”
According to a spokesman with the central bank in Dublin, Credit Suisse is the first non-European Union lender to gain authorization to set up a branch in Ireland. Prior to 2013, such banks had to operate as full subsidiaries in Ireland, directly regulated by the Irish authorities.
Credit Suisse currently carries a Zacks Rank 4 (Sell). A couple of better-ranked foreign banks include Barclays PLC BCS and Erste Group Bank AG EBKDY. Both the stocks hold a Zacks Rank #2 (Buy).
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