Credit Suisse is to slash the size of its investment banking business with the loss of a further 1,500 jobs as it seeks to meet stricter new regulations, it has said.
Switzerland’s number two bank disappointed the market with quarterly results that fell short of expectations. Its net profit rose 12 per cent to 683m Swiss francs (£490m), missing expectations for 1.1bn francs.
Credit Suisse said the new cuts should bring its cost savings to 2bn francs by 2013, and come on top of 2,000 cuts announced in July out of a total workforce of about 50,700, aimed at saving an annual 1bn francs.
"We believe subdued economic growth and the low interest rate environment and increased regulation that we are seeing may persist for an extended period," its chief executive Brady Dougan said in a statement.
"We may well continue to see ... low levels of client activity and a volatile trading environment."
Its shares have fallen almost 15 per cent, compared with a 5.1 per cent drop in European banks as a whole after Greece called a referendum on the latest Eurozone bailout deal.
"Weaker than expected results, strategy refinement could lead to improved business over time," said analyst Teresa Nielsen at banking group Vontobel in a client 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.
In line with other banks this quarter, Credit Suisse’s figures were flattered by a 1.34bn franc accounting gain on the value of its own debt, which occurs because the bank could profit from buying back its own bonds at lower levels.