Credit Suisse to cut $1 billion more costs as profits fall
By Katharina Bart
ZURICH (Reuters) - Credit Suisse CSGN.VX will cut an extra 1 billion Swiss francs ($1.1 billion) of costs, including axing more jobs, after its third-quarter net profit more than halved due to losses on the value of its own debt.
Volatile financial markets, a dearth of deals and tighter capital rules in the wake of the 2007-9 financial crisis are forcing investment banks across the world to slash costs, and the euro zone debt crisis has pushed many to cut back even more.
Profits from Credit Suisse's investment bank rose, helped by a pick up in bond trading that has already been noted by U.S. investment banks and is expected to boost European peers as they report quarterly results over the coming days.
However, that was offset by weakness in Credit Suisse's private banking business, which caters for wealthy clients.
Credit Suisse said on Thursday it was targeting 4 billion francs in cost savings by 2015, up from a goal of 3 billion francs it set in July and an earlier figure of 2 billion.
The bank, which is already cutting 3,500 staff or 7 percent of its workforce, said job losses would be inevitable to achieve the extra savings, but did not say how many more staff would go.
It has already combined the separate operating platforms of its two main units - private banking and investment banking - and will increasingly shift information technology jobs to Poland and India as part of its cost saving drive, finance chief David Mathers told journalists.
Crosstown rival UBS UBSN.VX, which reports quarterly results on Tuesday, is also expected to announce job cuts to protect profits as it withdraws from riskier investment banking areas which soak up large sums of capital. Continued...