Credit Suisse slashes jobs, looks to emerging giants
Swiss banking giant Credit Suisse said on Tuesday it would slash another 1,500 jobs while reorientating itself to capture the fast-growing emerging markets of Brazil, China, Russia and Southeast Asia.
Most of the reductions would fall "relatively evenly across all of our developed world economies," said David Mathers, the group's chief financial officer, adding that the private bank unit would be less affected than others.
The group hoped to save 800 million francs (656 million euros, $900 million) by 2013 from the 3.0 percent reduction of its workforce, which stood at 50,700 at the end of September.
This marks the second round of job cuts in just over three months. At the end of July, the group said 2,000 posts would go due to the difficult market environment.
But while cutting costs in the developed world, the group said it would 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," said the bank.
Overall, the bank's third-quarter net profit rose 12 percent from a year ago to 683 million francs (562 million euros, $776 million).
But investors were not impressed. At market open, the bank's stocks plunged 9 percent, the worse performer on the Swiss Market Index, which was also trading lower due to persistent concerns over the eurozone's debt crisis.
Mathers acknowledged that Credit Suisse's results were below expectations, saying that they were "disappointing overall results for the 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 in net profits of 78 percent from the figure a year ago, as the bank set aside massive provisions for two tax litigation cases.
They include a 150-million-euro (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.
© 2011 AFP