Swiss banking giant Credit Suisse said on Thursday that thousands of jobs would go after it reported a 52 percent plunge in second quarter profit due to the European debt crisis and global economic uncertainties.

"/> Swiss banking giant Credit Suisse said on Thursday that thousands of jobs would go after it reported a 52 percent plunge in second quarter profit due to the European debt crisis and global economic uncertainties.

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BANK

Credit Suisse to cut 4% of staff worldwide

Swiss banking giant Credit Suisse said on Thursday that thousands of jobs would go after it reported a 52 percent plunge in second quarter profit due to the European debt crisis and global economic uncertainties.

Credit Suisse to cut 4% of staff worldwide
Giorgia Xenakis

Net profit for the three months ending June fell to 768 million Swiss francs ($957 million) from 1.6 billion francs a year ago, amid “disappointing performance” by its investment bank unit. 

Pre-tax income for the investment bank slumped 71 percent compared with the second quarter last year. 

Concerns over the European debt crisis and weakening global economic indicators led to weak client demand and a poor trading environment, said the group. 

In addition, the strong Swiss currency took 348 million francs off pre-tax income compared with a year ago. 

The slowdown was also felt in the amount of new assets that the bank was able to attract during the quarter. Net new money declined 25.1 percent from a quarter ago, reaching just 14.3 billion francs during the three months ending June. 

“In order to ensure attractive returns in the face of an uncertain and challenging economic and market environment, we continue to be proactive about seeking cost efficiencies across the bank,” said Brady Dougan, chief executive of the group. 

Credit Suisse said it was therefore planning to slash four percent of its headcount across the group as part of a programme to save one billion francs in costs through 2012. 

The group employed 50,700 full-time employees at the end of the second quarter, according to its earnings statement, suggesting that just over 2,000 jobs would be lost. 

About 500 redundancies are expected in Switzerland alone, with cuts to affect the investment bank unit mainly, said David Mathers, chief financial officer of the group. 

He added Credit Suisse had already “started to implement” the cuts in Britain, and that growth areas and fast-growing markets would be less affected by the planned reductions. 

The cost cuts were a “necessary response to this environment,” said Mathers. 

Its announcement came on the heels of its cross-town rival UBS, which said it would reduce headcount so as to save 1.5 to 2.0 billion francs over the next two to three years. UBS however did not give specific figures on post reductions. 

Elsewhere, British group Lloyds earlier also announced 15,000 cuts while US financial giant Goldman Sachs said it would axe 1,000 employees. 

Bank Wegelin analysts said Credit Suisse’s results raise “more questions on what is the point of the investment bank.” 

Stocks in Credit Suisse fell 2.29 percent to 28.59 francs in morning trade, underperforming the overall Swiss Market Index, which was down 0.41 percent.

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BANK

Credit Suisse slashes jobs, branches to move ‘online’

Credit Suisse, Switzerland's second-biggest bank, said Tuesday it would reorientate its domestic services towards digital banking, with a quarter of its Swiss branches to close and hundreds of jobs at risk.

Credit Suisse slashes jobs, branches to move 'online'
A Credit Suisse branch. Photo: FABRICE COFFRINI / AFP

“In the last two years alone, use of online banking at Credit Suisse has grown by approximately 40 percent, while the use of mobile banking has more than doubled,” the bank said in a statement.

“The COVID-19 crisis has further accelerated these trends. In contrast, the number of visits to branches has been declining for years.

“Credit Suisse will introduce a new digital offering and a future-oriented branch concept at the end of October.”

The bank also plans to merge the activities of regional subsidiary Neue Aargauer Bank with those under the Credit Suisse brand to avoid duplication.

READ: How to open a bank account in Switzerland 

With its realignment, the bank intends to reduce annual costs by around 100 million Swiss francs ($110 million, 93 million euros) from 2022 onwards. It plans to cut the number of bank branches from 146 to 109.

Meanwhile up to 500 jobs could be axed, Andre Helfenstein, head of the bank's operations within Switzerland, told reporters during a conference call.

The restructuring costs are expected to be 75 million Swiss francs. “Digitalisation is happening all around us,” Helfenstein said in a statement.

“The changes we are making to our branch network — while simultaneously investing in digital solutions and in advisory services for clients with more complex needs — represent a logical step forward.”

In late July, the bank's new chief executive Thomas Gottstein unveiled his plans for Credit Suisse, which involved regrouping its different investment bank activities.

Gottstein took charge in February after Tidjane Thiam was ousted over a massive spying scandal.

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