Credit Suisse will cut another 1,500 jobs and scale back its capital-guzzling investment banking business as it seeks to meet tough new regulations ahead of other banks after the unit reported disappointing third-quarter results.
The job losses come on top of 2,000 cuts announced by the Swiss bank in July out of a total of 50,700. The cuts, which amount to 7 per cent of its global workforce, should bring annual cost savings of Sfr2bn (£1.4bn) by 2013, the bank said.
Banks are shedding jobs as strict capital rules aimed at shielding them from future financial crises and a tough third-quarter for trading income take their toll on investment banking divisions in particular.
Japan's Nomura Holdings, which posted its first quarterly loss in two and half years yesterday, also increased its cost cutting target.
CS said net profit rose 12 per cent to Sfr683m, flattered by a Sfr1.34bn accounting gain on the value of its own debt – which occurs because the bank could profit from buying back its own bonds at lower levels. The investment bank unit reported a pre-tax loss of Sfr190m – its first loss since the last quarter of 2008, as it was hit by challenging market-making conditions.
Credit Suisse said it had taken a provision of Sfr295m for settling a US investigation into its activities in helping wealthy Americans dodge tax. The inquiry is continuing although the provision suggests a deal could be near.Reuse content