Suisse to shed more bank jobs

Credit Suisse will cut another 1,500 jobs and scale back its capital-guzzling investment banking business as it seeks to meet tough new regulations ahead of other banks after the unit reported disappointing third quarter results.

The job losses come on top of 2,000 cuts announced by the Swiss bank in July out of a total of about 50,700. The cuts, which amount to 7 per cent of its global workforce, should bring annual cost savings of 2 billion francs (£1.41bn) by 2013, the bank said.

Banks are shedding jobs as strict capital rules aimed at shielding them from future financial crises and a tough third quarter for trading income take their toll on investment banking divisions in particular.

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Analyst Dirk Becker at brokerage Kepler said the results were worse than those of UBS and Deutsche Bank, although Credit Suisse still traded at one of the highest valuations among European banks.

“We downgraded Credit Suisse in August after a string of disappointing results and amid still relatively high valuation.

“We confirm this view now,” he said in a note.

The cuts will further reverse Credit Suisse chief executive Brady Dougan’s post-crisis hiring spree focussed on fixed income, the area hit most by the market downturn this year.

Dougan, who admitted the quarter had missed the bank’s expectations, said the cuts would hit all regions and units, including its private bank.

The Credit Suisse announcement steals some of the thunder from rival UBS which is expected to announce a similar overhaul of its investment bank at an investor day on November 17.