Swedbank is gearing up for a fresh round of cost-cutting and is taking aim at it investment banking division.
We hinted that Swedbank’s Large Corporates & Institutions (LC&I) division could be included in the 300 redundancies announced at the tail end of last year. Now, as the bank looks to cut costs by a further SEK1bn this year, these cutbacks look set to continue.
In its Q4 results released today, during which it revealed that net income fell to SEK965 from SEK2.75bn a year earlier, Swedbank said that it was performing a “cost analysis” of staffing, premises and IT within its LC&I business in order to adjust to “current market conditions”. This is despite a 4% increase in profit within the division.
Generally, Swedbank has been cutting costs in 2011, and redundancies have been announced. However, while it cut nearly 940 posts throughout the year, over 630 were in Russia and the Ukraine, 195 in its Baltic banking operation and nearly 240 hit its retail division. It had so far looked to spare its investment bankers.
There are some slight positives within the results, however. In its retail business it added 150 new people as it attempted to strengthen its affluent, SME and ‘midcorps’ expertise. This is despite 450 people departing the branch network throughout 2011.
It also increased headcount within its group functions – IT, shared services and transformation – by over 120 people and Swedbank says it will be “developed over the next two years”