(Bloomberg) -- Credit Suisse Group AG is cutting as many as 35 positions at its equities business in Asia after the unit’s revenue slumped, a person with knowledge of the matter said.
The firm is mainly culling trading, sales, prime brokerage and research positions in the region, according to the person, who asked not to be identified discussing private information. The latest round of reductions, which started about two months ago, will be completed by June, the person said.
Credit Suisse is shaking up a markets business that was singled out as unprofitable and suffering from “significantly reduced client activity” by Chief Executive Officer Tidjane Thiam when reporting first-quarter earnings last month. Equities trading revenue dropped 16 percent in Asia-Pacific in the quarter, stung by a slump in derivatives sales.
A Credit Suisse spokesman declined to comment on the cuts.
The Zurich-based bank is also seeking the shrink the Asian equities unit’s balance sheet, excluding derivatives, by 15 percent to 18 percent to free up capital it can use elsewhere, the person said.
Several global investment banks cut the size of their Asian equities units last year or exited the business entirely amid volatile trading commissions. Chinese markets in particular have been going through boom-bust periods since 2015 that have made the business tough to predict.
Credit Suisse lost its position as the second-biggest bank in Asia-Pacific equities by revenue to Morgan Stanley last year, research firm Coalition said in March. Swiss competitor UBS Group AG remained at the top of the rankings and Credit Suisse shared the No. 3 position with Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to Coalition.
Thiam said at a press conference in Hong Kong last month that the bank has been restructuring its Asian equities business, adding that the process would continue in the second quarter. Among senior executives at the unit to leave this year are Donald Lee, the former co-head of cash equities for Asia-Pacific, and Matt Pecot, who ran prime services in the region. In March, Credit Suisse appointed derivatives veteran Ken Pang to run the regional global markets business, succeeding Ali Naqvi.
The Asian operation, which Thiam gave increased independence after taking over as CEO to reflect the region’s growth potential, has failed to meet his expectations. In December, Credit Suisse announced plans to cut an additional 1 billion Swiss francs ($1 billion) of costs after lowering profit targets for the Asian division and for the international wealth-management operation.
Credit Suisse last month hired two senior executives from Deutsche Bank AG, Neil Hosie and Patrick Kelly, for its equities business in Asia.
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