Credit Suisse Mulls Splitting Investment Banking Unit, Outlines Plans

Credit Suisse Group AG CS weighs splitting its struggling investment bank business into three parts, which could involve thousands of job cuts as the Swiss bank reshapes its business.
The bank has drawn up plans to split its beleaguered investment banking unit, including resurrecting a so-called 'bad bank' to hive off unwanted assets, the Financial Times reported citing people familiar with the matter.
The latest proposals under consideration would see the investment bank divided into three parts:
- The advisory business, which could be spun off at some later point,
- Bad bank to hold high-risk assets that will be wound down.
- The rest of the business.
Chair Axel Lehmann installed a new chief executive, Ulrich Körner, with a mandate to overhaul its business. In its second-quarter results, the bank said it is evaluating strategic options for the securitized products business.
Related: Credit Suisse Considers Axing 5,000 Jobs In Cost Reduction Drive.
However, it is set to unveil further detail on the new strategy during its third-quarter results on 27 October.
In a statement to the Financial Times, Credit Suisse said that it will reveal an update on its plans during its third-quarter results and that it would be "premature to comment on any potential outcomes before then."
Price Action: CS shares traded 0.80% lower at $4.96 premarket on the last check Thursday.