The jobs cull continued in the banking sector yesterday as Credit Suisse announced it would cut 2,000 positions and reports surfaced that HSBC was planning to announce thousands of redundancies.
Up to 200 jobs are expected to go at Credit Suisse's investment banking operation in London as part of restructuring, which the group announced alongside a slump in its second-quarter profits.
In keeping with its rivals, Credit Suisse's investment banking unit suffered badly from the debt crisis in the second quarter, reporting a 71 per cent slump in pre-tax profits that dragged the group's overall pre-tax profits down by 52 per cent to SwFr768m (£586m).
The group was also hit by the soaring value of the Swiss franc – up 7 per cent against the euro and 9 per cent against the dollar in the quarter, as investors increasingly viewed it as a safe haven. This diminished the value of Credit Suisse's overseas revenues. The slump came two days after UBS reported a 71 per cent dive in investment banking revenues and Deutsche Bank a 32 per cent decline in corporate banking and securities revenues, fuelling concerns that UK banks could report similar difficulties when they unveil their interim results next week.
The bulk of the job cuts Credit Suisse announced yesterday will fall in the bank's investment banking unit, which has its main business in New York but also has a substantial presence in London.
Separately, HSBC refused to deny reports that it was planning to cut about 10,000 jobs as the UK's biggest bank shifts its focus from the high street to commercial and investment banking as part of its strategy, announced in May, to "step up the pace and intensity of change".
The HSBC and Credit Suisse redundancies emerged two days after UBS warned it would cut a substantial number of jobs "across all categories and divisions".Reuse content