April 4, 2019 / 11:09 AM / in 19 days

Switzerland's Raiffeisen to cut jobs, aims for 76 million pounds savings

The logo of Swiss Raiffeisen bank is seen at an office branch in Zurich, Switzerland April 4, 2019. REUTERS/Arnd Wiegmann

ZURICH (Reuters) - Raiffeisen Switzerland is cutting up to 200 jobs as it targets 100 million Swiss francs (76.18 million pounds) in annual cost savings, the nation’s third-largest bank said on Thursday, as it reorganises in the wake of fraud allegations against its former chief executive.

The cooperative bank said it is creating a “Raiffeisenbank Services” department to support activities including back-office activities and marketing. A second new department, called “Business Customers & Branches,” will contain the services that Raiffeisen offers directly to customers.

Raiffeisen was left reeling after one of its most difficult years in its 120 year history, when profit fell 41 percent to 541 million francs in 2018 as it reduced the value of investments.

The St. Gallen-based lender’s was also criticised by Swiss financial supervisor FINMA after it unearthed serious breaches.

“In addition to structural optimization, Raiffeisen Switzerland wants to increase its efficiency,” the lender said. “Through a systematic review of personnel and material costs, a savings target of up to 100 million francs is to be achieved. At Raiffeisen Switzerland, a maximum of 200 jobs will be affected.”

Former CEO Pierin Vincenz, who was incarcerated for several months but was released, has denied wrongdoing, as prosecutors investigate alleged breach of trust linked to cashless payments business Aduno as well as private equity firm Investnet.

A big share of the job cuts are expected to come through early retirements and normal staff turnover, Raiffeisen said, with the efficiency programme due to be completed by the end of 2020. CEO Heinz Huber said the initiatives will refocus Raiffeisen “structurally, financially and culturally” so customers should expect higher performance.

Reporting by John Miller, editing by John Revill

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