C.Suisse ends oldest Swiss bank brand Leu
By Emma Thomasson
ZURICH (Reuters) - Credit Suisse Group AG CSGN.VX will fully integrate private bank Clariden Leu into its organization, ending the 250 year-old Leu brand and cutting jobs to achieve 200 million Swiss francs ($220 million) in annual cost savings.
Credit Suisse said the step was part of plans announced earlier this month to increase the contribution of its private bank to group pretax income by 800 million francs by 2014.
The integration would mean a total of 550 jobs will go at Clariden Leu and Credit Suisse as part of an overall staff reduction of 1,500 announced across the group on November 1, said Hans-Ulrich Meister, the new chief executive of Credit Suisse private banking appointed in July with a mandate to boost efficiency.
Meister told a news conference the decision to fully integrate Clariden Leu was the result of worsening industry conditions in recent months, particularly for smaller private banks that are more reliant on offshore business than big banks.
"We could close our eyes and hope the good, old times come back but we're not going to do that," he said. "There have been brutal changes in the environment."
As cash-strapped governments worldwide have demanded more help hunting tax cheats, Switzerland has been forced in recent years to weaken a tradition of strict bank secrecy that had helped it build up an offshore industry worth $2 trillion.
Clariden Leu had seen three years of net client outflows since it was established in 2007 after the merger of Credit Suisse's five independent private banks, taking its name from two of them -- Clariden Bank and Bank Leu.
Credit Suisse shares fell 4.8 percent to 21.25 francs by 1139 GMT, underperforming a 3.2 percent weaker European banking sector index after news on Monday that ratings agency Moody's was putting the bank's AA1 rating under review for a possible downgrade. Continued...