Credit Suisse axes 2,000 jobs

City A.M. Reporter
Swiss bank Credit Suisse is cutting about 2,000 jobs after a second hit by weak trading activity and the strong Swiss franc.

Net profit fell to 768m Swiss francs (£570m), the bank said – below average analyst forecasts for 1 billion. Net new assets in private banking were 11.5 billion, below average analyst forecasts for 14.2bn.

Switzerland's second biggest bank said it planned to cut about four per cent of its staff of 50,700, about the same number it added in a post-crisis hiring spree focussed on fixed income, the area hit most by current sluggish markets.

"We have to recognise the likelihood that the current headwinds in the economic and market environment may be more persistent than we would have hoped," said Chief Executive Brady Dougan and Chairman Urs Rohner.

"We expect interest rates to remain low for an extended period of time and the strong Swiss franc to continue to have an impact on our results. We may also continue to see lower levels of client activity and a volatile trading environment."

Rival said it would cut costs by up to two billion francs and push back targets after reporting disappointing second-quarter profits due to slow trading in fixed income, currencies and commodities.

Credit Suisse shares, which had already slipped after the UBS results, were indicated down 2.3 per cent, pre-market data from Clariden Leu showed.

"Quarter two results are far below market expectations. The main reason for the very disappointing result was the investment bank," said DZ Bank analyst Matthias Duerr.