Back to top

Analyst Blog

Zacks Equity Research

Credit Suisse (CS) Cuts Equities Business Jobs in Asia

CS BMO KB DNKEY

Trades from $3

Credit Suisse Group AG (CS - Free Report) is carrying out a fresh round of job cuts at its equities business in Hong Kong and Tokyo after taking the same action in London, Dubai and South Africa.  Last Friday, the bank said that it will cut half a dozen equities jobs in the Asia Pacific region as a part of a pre-planned strategy to control costs and boost the bottom line.

Uncertain financial market conditions have reduced the company’s clients and market trading activities. According to Credit Suisse, major changes in the market environment and political outlook have negatively affected the market-dependent portion of its targets.

This cost control strategy comes after its weakest results among rivals from stock trading in the third quarter of 2016. In December, the company proposed to cut additional CHF 1 billion ($1 billion) in expenses. Moreover, it lowered profit targets for its Asian division after slashing its global workforce by more than 6000 in the same year.

Weakness in market trading activities and in asset management will translate into reduced profits for its Asia-Pacific unit and international wealth management divisions.

For its Asia-Pacific division, Credit Suisse has cut its target for 2018 pre-tax income from CHF 2.1 billion to CHF 1.6 billion. Per the Chief Executive Officer of the company, Tidjane Thiam, last year, the company’s equity trading volumes in China fell 47% while equity capital market volumes were down 29%.



Shares of the company are up 17.2% over the last six months, outperforming the Zacks categorized Banks - Foreign industry’s growth of 15.4%.

Currently, Credit Suisse carries a Zacks Rank #2 (Buy).

Management is under pressure to further deepen cost cuts. The company plans to dilute its investment bank business to support the wealth management division, which has significant growth potential.

Other Stocks to Consider

Other foreign bank stocks worth considering include Bank of Montreal (BMO - Free Report) , Danske Bank A/S (DNKEY - Free Report) and KB Financial Group Inc. (KB - Free Report) . All these stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bank of Montreal witnessed an upward earnings estimate revision of 4.6% over the past 60 days. Also, its share price is up 25.3% year to date.

Danske Bank A/S earnings estimates moved north by roughly 11.2% over the past 60 days and its share price is up 25 % year to date.

KB Financial Group Inc.’s earnings estimates have been revised upward by 2.9% over the past two months. Moreover, its share price is up 62.6% year to date.  

Zacks' 2017 IPO Watch List

Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.

One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>