Credit Suisse said its Swiss Universal Bank unit will undergo a massive restructuring, costing hundreds of millions of Swiss francs, to transition its retail and commercial customers to a newly created "direct banking" unit that primarily uses digital starting on Sept. 1. 

Credit Suisse will also move its investment banking unit out of the corporate and investment banking business unit and have it report directly to the CEO of SUB. 

The SUB unit will spend in the high three-digit million franc range to transform its client business to digital, and hire new employees for its client advisory business and marketing unit. 

Credit Suisse officials cited trends impacting the larger banking industry as the move to digital, negative interest rates, new competition, growing pressure on margins and changing customer preferences combine with several factors directly impacting the company, as Credit Suisse said it has lower market share in retail banking and among younger customers than in most other client segments.

"The new business area is our response to the significant changes in the market environment in recent years," Thomas Gottstein, CEO of SUB and Credit Suisse [Switzerland] Ltd., said in the announcement. "Maintaining the status quo was not an option — not least because we believe that the achievement of long-term success will not depend on having the biggest branch network in the future."

The new direct banking unit will serve 1 million retail clients, 60,000 commercial clients and 500 employees under the leadership of Mario Crameri, who previously was responsible for the IT and operations unit at SUB. 

The bank said its digital transformation will be accompanied by expanded telephone customer service, including extended hours and more staff, which it says will differentiate Credit Suisse from other banks. 

Further details of the changes will be released in the first half of 2020. 

The bank said pre-tax income at its SUB unit has increased from $1.6 billion [CHF 1.6 billion] in 2015 to $2.25 billion [CHF 2.2 billion] by 2018.

Cover image courtesy Credit Suisse.