Tidjane Thiam, CEO at Credit Suisse, spoke to Francine Lacqua on  Bloomberg TV this morning to discuss the bank’s latest restructuring steps, his outlook for the first quarter results, and keeping the dividend in place.

On the firm’s traders had ramped up holdings of distressed debt and other illiquid positions without many senior leaders’ knowledge, Thiam said: “This wasn’t clear to me, it wasn’t clear to my CFO who said it on the record also this morning. And to many people inside the bank. There needs to be a cultural change. It is completely unacceptable.”

He added: “A lot of our problems in the investment bank has been that people have been trying to generate revenue at all costs… So people were reluctant to reduce it because if it is exposed, there are cost problems.”

When asked whether he will have a loss in the first quarter because of today’s announcement, he said: “We’re cutting deeper, there will be more restructuring costs. The divisions before restructuring are profitable. Asia, Switzerland, International are profitable. Small loss in IBCM and a big loss in global market. That’s structural and due to investments we’re making right now.”

Credit Suisse CEO Tidjane Thiam: Restructuring, Q1 Results

Credit Suisse CEO Tidjane Thiam: There Needs to Be a Cultural Change

Francine Lacqua: Yes we are very excited that we are speaking to the Credit Suisse CEO; he’s Tidjane Thiam, on the day when you’ve made some further announcements.

Tidjane Thiam: Good more Francine.

Francine Lacqua: Mr. Thiam thank you very much for giving your time to Bloomberg. Give us first of all a sense of why we had an update with further job losses, further restructuring now? You unveiled the strategy five months ago.

Tidjane Thiam: Indeed.

LACQUA: Why the need to go further today?

Tidjane Thiam: It’s an acceleration. And it’s also a response to a number of events that happened between October and now. If you look at the strategy we announced in October, two key elements in that were already cost cutting program $3.5 billion and a resizing of (INAUDIBLE) markets. We said at the time taking down to $85 billion.

So in essence what we announced today is really pushing (INAUDIBLE) and shrinking global market more. So from $85 billion to $60 billion. And really that is largely a reaction to what happens in (INAUDIBLE). If you look at markets, January was the worst January ever. Yes we had a plan that was reversed and that was designed for most conditions. But not the worst January ever.

And the other thing is that there’s been structural changes also in regulation. Which means that certain elements of our business particularly the securitized products where there’s now a very, very stringent stress test from the Fed just structurally have a lower profitability.

Francine Lacqua: Right.

Tidjane Thiam: So I had to review their sizing and we used that (INAUDIBLE) frankly very difficult markets and low revenue, to take a fresh look at the cost base in global markets and take it down more significantly. And to be candid there is also a new organization which really design and one of the benefits I expected from it was better visibility, better accountability. Before everything was together. The fact that we separated, (INAUDIBLE) is very clear, Switzerland and it’s made some of the underlying problems in global markets very, very visible.

Francine Lacqua: Is this what shareholders wanted all along?

Tidjane Thiam: You’d have to ask them. You’d have to ask them.

LACQUA: We hear yes.

Tidjane Thiam: Look the promise, there has been no promised timing. It’s just that we developed a strategy last summer. It was a (INAUDIBLE) in the summer and with world trade since then. And we’ve worked, I believe very diligently night and day since January, February, March to have a proper plan. And we’re very happy to present it to the market.

But I will still say that the new fundamental insights of the strategy are still varied. Wealth management is an attractive, is less represented, (INAUDIBLE) numbers to day. It’s really a very dangerous strategy. We’re in Asia and international 7 billion, 3 billion. So that remains varied. We said that we would shrink the investment bank, that remains varied. What we have had to do is sort of assessment of our business in new market conditions. And that leads to more drastic restructuring.

Francine Lacqua: You said you were surprised by your illiquid positions.

Tidjane Thiam: Yes.

Francine Lacqua: When did you find out about them?

Tidjane Thiam: In January.

Francine Lacqua: And why was this not clear before?

Tidjane Thiam: Well as I said on the record, this wasn’t clear to me, it wasn’t clear to my CFO who said it on the record also this morning. And to many people inside the bank. And that’s where I said there needs to be a cultural change. It is completely unacceptable. And there has been people consequences around that–

Francine Lacqua: Well because people were trying to withhold information or was it just–?

Tidjane Thiam: It’s a very interesting question. It’s linked to a cost problem. If your costs are too high and you’re not taking them down, you will lead a revenue driven strategy. A lot of our problems in the investment bank has been that people have been trying to generate revenue at all costs if I may say so. Because you want to just cover your (INAUDIBLE) costs.

So apparently that book, it was a high yielding book, and generating a lot of revenue. So people were reluctant to reduce it because if it is exposed, there are cost problems. And there was no transparency around that. That book had already created problems. Had been taken down and it was ramped up without the understanding of many key decision makers–

Francine Lacqua: And you’re confident that this won’t happen again?

Tidjane Thiam: I am confident that we have good processes in place to try to ensure that this never happens again. I can never say never. I have a good level of confidence that we now understand what’s going on better. And we have better processes in place to monitor the situation.

Francine Lacqua: Had you known about these liquid positions back in October would–

Tidjane Thiam: I would have taken them down immediately.

Francine Lacqua: So you would have had–

Tidjane Thiam: In my private world I was telling people to stay away from high yield two years ago. So, yeah.

Francine Lacqua: So the strategy would have been not necessarily stronger but deeper in cuts if you had known about this.

Tidjane Thiam: Strategy wouldn’t have been different, we just have, we’ve explained today that we’ve taken that book down. We’ve fundamentally reduced volatility to earnings by 50%. What it would have done is just probably generated a Q4 that would have been less drastic. I’ve always been for the (INAUDIBLE) previous jobs I saw all my euro exposure in 2009. And I’m a very, how can I say this? Risk averse defensive manager, and I can tell you that the risking we’ve done, it’s cost us. But it’s protected us a lot. If we had not the risk the way we’ve done since we found about this (INAUDIBLE) in

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