Credit Suisse replaced its embattled chief executive officer and said it would embark on a new turnaround plan just nine months after the last one, as the Swiss bank indicated it aims to slash the size of its investment bank in the face of mounting losses.

The firm tapped asset management head Ulrich Koerner to take the reins starting next week, replacing Thomas Gottstein, who is resigning after a two-year tenure marked by scandal and huge losses.

The firm, which posted a larger-than-expected 1.59 billion Swiss franc (€1.63 billion) second quarter loss on Wednesday, said the review will include cutting at least another €1 billion of costs. The second quarter loss was driven by declines at the investment bank and trading businesses and higher litigation expenses.

The bank saw net outflows of 7.7 billion francs as clients traded less and cut risk in response to gyrating equity markets.

The investment bank’s revenue fell 55 per cent in the second quarter, driven by a slump in trading and €241 million in losses from its leveraged finance business.

Credit Suisse — where outgoing Bank of Ireland chief executive Francesca McDonagh is set to take up a role as head of European operations later this year — said that the pain at the investment bank is far from over, with third-quarter trading marked by continued weakness in client activity.

The bank also said in a statement on Wednesday that it was “considering options for fundamentally reshaping the investment bank, including attracting third-party capital. The firm said it wants an investment bank that uses less capital and is more tied to its wealth franchise, indicating possible deeper cuts than planned.

The bank also said it aims to trim its overall cost base to €15.5 billion in the medium term, well below the target of €16.9 billion to €17.4 billion it set out late last year.

Chairman Axel Lehmann is seeking to steer the bank back to profitability — and stability — after scandals such as the blow-up of Archegos Capital Management and Greensill Capital eroded investor confidence. The Swiss lender has changed its entire executive team and half its board of directors in the past 18 months in an effort to move past the crises.

The firm has spent the past three years mired in scandals — starting with a spying fiasco that led to Mr Gottstein taking the reins from Tidjane Thiam — that has left it floundering at a time when many rivals have seized on active markets to thrive. Now with inflation fears and the war in Ukraine spurring more turbulence, Credit Suisse losses have totalled almost €4.1 billion in the past three quarters. — Bloomberg