C.Suisse to cut jobs as Q2 sags on poor trading

Swiss bank Credit Suisse announced it would cut about 2,000 jobs as it reported second-quarter net profit that missed expectations, dented by weak trading activity and the strong Swiss franc.

Credit Suisse reported net profit fell to 768 million Swiss francs, below average analyst forecasts for 1 billion. Net new assets in private banking were 11.5 billion, below average analyst forecasts for 14.2 billion.
It said it planned to cut about 4% of its total staff of 50,000, about the same number it has added in a post-crisis hiring spree, particularly in fixed income, the area hit most by current sluggish markets.
It said the job cuts would be part of a cost savings programme aimed at reducing 1 billion Swiss francs in the expense run-rate during 2012. Implementation costs in 2011 would be 400-450 million francs.
"Our performance in Investment Banking was below our expectations," said Chief Executive Brady Dougan in a statement.
"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."
Rival UBS said on Tuesday it would cut costs by up to 2 billion francs and push back targets after reporting disappointing second-quarter profits due to slow trading in fixed income, currencies and commodities (FICC).
Investment banking has been hit by slow trading due to the debt crises in the euro zone and United States as well as post-crisis regulations aimed at forcing banks to hold more capital to protect them from future shocks.
Credit Suisse also announced it had appointed Hans--Ulrich Meister new chief executive of private banking in addition to his role as CEO Credit Suisse Switzerland, while Walter Berchtold would move to become chairman of private banking.