Credit Suisse boss delivers blow to costly London

Credit Suisse boss delivers blow to costly London

Credit Suisse is thinking of moving nearly 2,000 jobs out of London because of its high costs, the bank’s new boss said yesterday, dealing a blow to the city’s status as Europe’s dominant financial centre.

Chief executive Tidjane Thiam estimated the Swiss-based bank could save SFr230 million (€212 million) a year if some back-office positions were moved to lower cost centres such as in Poland and India. This could mean saving SFr128,000 for each of the estimated 1,800 jobs in question.

Thiam, who swapped London for Zurich after six years at the helm of London-based insurer Prudential, was speaking after the bank set out plans for a major overhaul, including measures to “right-size” its staff numbers in London, where most of its investment bankers are based.

“We have 6,600 jobs [in London], 2,400 front office, 4,200 back office. Of the 4,200 about 2,400 are directly connected to the front office so they need to be co-located with the front office,” Thiam said at a press conference.

1,800 [staff] frankly don’t need to be in London

“The other 1,800 frankly don’t need to be in London, and that’s the potential we’re looking at, plus a little bit of efficiency in the front office.”

The City of London regained its crown as the world’s leading financial centre in 2015, after losing it to New York in 2014, following a decisive national election victory by the Conservative Party, according to research company Z/Yen.

Jobs in London’s financial and related professional services industry reached an all-time high of 729,600 as at June 2015, the latest survey by lobby group TheCityUK said.

But tough regulation imposed since the financial crisis and uncertainty about Britain’s membership of the European Union have prompted a number of big banks, including HSBC, to look at the economic viability of remaining in the City.

In Canary Wharf, where Credit Suisse has its London offices, property prices have risen by 27 per cent since early 2013, outstripping the 10 per cent growth seen across prime central London over the same time, according to an index from property company Knight Frank.

Prime office space in Warsaw costs some €270 per square metre compared with €670 per square metre in Canary Wharf, according to Savills, another property group.

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