London
CNN Business
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Credit Suisse will raise $4 billion to step back from Wall Street and double down on managing the finances of the world’s wealthy, the scandal-plagued Swiss bank said on Thursday.

The company unveiled a “radical” turnaround plan that it said would leave it “a stronger, more resilient and more efficient bank.” The effort means it will slash 9,000 full-time jobs by the end of 2025, with 2,700 cuts to come shortly.

“This is a historic moment for Credit Suisse,” CEO Ulrich Körner said in a statement.

The lender said it already had a commitment of up to $1.5 billion from the Saudi National Bank, which would give it a stake of just under 10%.

The announcement failed to reassure investors — especially since it was accompanied by news that the bank lost roughly $4 billion in the third quarter. Shares of Credit Suisse

(CS) plunged 15% in morning trading in Zurich.

The bank attributed its financial performance to widespread market volatility and global economic turmoil that’s pushed clients to avoid risk, as well as the execution of its restructuring plan.

Chairman Axel Lehmann said he was convinced Credit Suisse now has a “blueprint for success.” It will dramatically overhaul its investment bank, offloading a huge chunk of risky assets, and spin off CS First Boston, an independent unit that will house its capital markets and advisory business.

As part of its effort to downsize its investment bank, Credit Suisse will also transfer “a significant portion” of its securitized-products group to a consortium of investors led by Apollo Global Management, the private equity firm. The unit trades securities backed by mortgages and other loans.

Additionally, Credit Suisse is aiming for billions of dollars in cost reductions. The bank recently disclosed that it’s looking to sell the famous Savoy Hotel in Zurich and sold its stake in the fintech company Allfunds.

The lender is looking to begin a new chapter after a difficult stretch that’s damaged its business and reputation.

One high-profile blunder involved the collapse of the US hedge fund Archegos Capital last year, which cost Credit Suisse $5.5 billion. An independent external investigation later found “a failure to effectively manage risk.”

Earlier this month, social media speculation that the bank was on the brink of collapse sent shares on a wild ride.

Analysts said that Credit Suisse had more than enough capital on hand to meet regulatory requirements and the liquidity necessary to deal with a potential shock. But Credit Suisse said Thursday that it had been hurt by the tumult.

Assets under management fell to $1.4 trillion, declining by nearly $54 billion over the quarter as clients pulled their money.

“During the first two weeks of October 2022, following negative press and social media coverage based on incorrect rumors, Credit Suisse experienced a significant level of deposit and assets under management outflows,” the bank said. “While these outflows have stabilized since this period, they have not yet reversed.”