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, it said on Tuesday after reporting 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 about 50,700, aimed at saving an annual 1 billion francs ($1.2 billion). It said the new cuts should bring cost savings to 2 billion francs by 2013.
Banks are shedding jobs worldwide as stricter regulations 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 2-1/2 years on Tuesday, also increased its cost-cutting target.
Credit Suisse Group shares traded 8.7 percent lower at 23.37 francs by 0848 GMT, compared with a 5.1 percent drop in European banks as a whole after Greece called a referendum on the latest eurozone bailout deal.
“The results are worse than those of UBS and Deutsche Bank, but the valuation of Credit Suisse of ... almost 1 times price-to-book value is one of the highest among European banks,” said analyst Dirk Becker at brokerage Kepler in a research note.
The cuts will further reverse Credit Suisse Chief Executive Brady Dougan’s post-crisis hiring spree focused on fixed income, the area hit most by the market downturn this year.
Dougan told Reuters Insider television the cuts would hit all regions and units, including its private bank. “It is an indicator of the direction the industry has to go,” Dougan said.
Switzerland’s other big bank, UBS, said in August it was slashing 3,500 jobs to shave 2 billion francs off annual costs and is expected to announce more cuts at an investor day on November 17, when it is due to detail an investment bank overhaul.
CS said net profit rose 12 percent to 683 million francs, missing a Reuters poll estimate for 1.1 billion.