Credit Suisse cuts 3% of staff

Credit Suisse cuts 3% of staff
Pingelig (File)

Swiss banking giant Credit Suisse said on Tuesday that third-quarter net profit rose 12 percent from a year ago to 683 million francs ($776 million), but said it would cut staff by three percent.

As the group employed 50,700 people at the end of September, its latest cost-cutting programme would see a reduction of about 1,500 jobs.

The group did not specify the departments targetted for cuts, but said it hoped to save 800 million francs by 2013 from the reductions.

This marks the second round of cuts in just over three months. At the end of July, the group said it would slash 2,000 jobs due to the difficult market environment.

However, Credit Suisse said on Tuesday that it was planning to invest in the faster-growing emerging markets of Brazil, Southeast Asia, China and Russia.

“This is expected to increase revenues from these markets from 15 percent in 2010 to 25 percent by 2014,” it said.

For the third quarter, all three of Credit Suisse’s main business sectors — asset management, investment banking and private banking — reported poor earnings.

Investment banking posted a loss of 190 million francs, while asset management recorded a 32-percent plunge in profit before taxes.

Private banking recorded a drop of 78 percent from a year ago, as the bank set aside massive provisions for two tax litigation cases.

They include a €150-million (183-million-franc) settlement announced in mid-September to end a probe by German authorities into whether the bank helped Germans to evade taxes.

Another 295 million francs have been set aside for a similar probe in the United States.

“We believe subdued economic growth and the low interest rate environment and increased regulation that we are seeing may persist for an extended period,” said Brady Dougan, chief executive officer of the bank.

“We may well continue to see continued low levels of client activity and a volatile trading environment,” he said, adding that the group was “well-equipped” to deal with the environment.

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