Credit Suisse profit plunges, to cut 4% of staff worldwide

28th July 2011, Comments 0 comments

Swiss banking giant Credit Suisse said Thursday that its second quarter net profit plunged 52 percent, adding it would cut about four percent of its jobs worldwide.

Net profit for the three months ending June fell to 768 million Swiss francs ($957 million, 667 million euros) 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 franc 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 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.

Its announcement came on the heels of its cross-town rival UBS, which said it would reduce headcount so as to cut 1.5 to 2.0 billion francs in costs 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.

© 2011 AFP

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