Credit Suisse to cut 2,000 jobs after 52% profit drop

Swiss banking group Suisse on Thursday announced a 2Q11 net earnings drop of 52 percent year-on-year to SFr768m amid weak trading activity and currency exchange effects of the Swiss franc.

The group's wealth management division reported a pre-tax profit of SFr843m, down four per cent from 2Q10 due to “challenging” market conditions, a statement said.

Credit Suisse plans to cut four percent of its global headcount, an estimated 2,000 , as part of a cost savings programme that is expected to reduce expenses by SFr1bn annually starting in 2012.

CEO, Brady Dougan, said: “Asset management showed a strong performance in the quarter, and private banking recorded solid results despite significant market headwinds and maintained its strength in gathering net new assets. However, our performance in investment banking was below our expectations.”

Commenting on the planned cost savings, he said: “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.”

The bank said that its Switzerland boss, Hans-Ulrich Meister, will also take over the CEO role in the private banking division starting in August. The current CEO, Walter Berchtold, will become chairman of private banking, the group said.

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