Many investment banks in Asia choose to let go of some staff due to the slump in capital markets. The first bank cutting headcounts in its Asian investment bank, is Credit Suisse. Most staff members losing the job are from corporate finance and M&A. In addition, the firm argued that there would be more additional cuts in the near future. This includes the equity capital markets business. People familiar with the situation noted that the cuts majorly take junior staff as well.
Based on the sources, Rachel Li, a managing director in the technology, media, entertainment, and telecommunication sector has just left. Eric Zhou, a director in M&A business, also left the company due to the dry activity in the capital market. Credit Suisse on the other hand, declined to give any comment regarding the job cut. But so far, the media understood the bank’s situation, especially concerns on Asia Pacific investment banks’ headcounts.
Previously on June 8, the bank had updated its trading announcement regarding the macroeconomic factors. One of the factors is the Russian invasion of Ukraine. This leads to the heightened market volatility, weak customer flows, and ongoing client deleveraging in the APAC region. Actually the trouble extends beyond Asia. Credit Suisse is also one of the banks failing to meet margin calls in Archegos Capital Management since March 2021.
The company previously lost around SF4.8bn or $4.8bn due to the transaction in 2021 annual report. As a result, Credit Suisse clients lost investment money in the supply chain financing. This is due to the collapsed financier Greensill Capital. Then, the situation got worse when some investors filed civil actions against Credit Suisse. This situation does not only hit Credit Suisse, but also other European banks announcing cuts this month.
