Further cuts confirmed at Credit Suisse

Numbered days? Employees in the doorway of a Zurich branch of Credit Suisse Keystone

Credit Suisse intends to save a further SFr1 billion ($1.07 billion) in the next three years, on top of the SFr3 billion cost cutting programme that has already been announced.

But the bank refused to elaborate on how many jobs could be at threat as it announced on Thursday a 63 per cent fall in third quarter profits from the same period last year – from SFr683 million to SFr254 million.

Speculation has been rife in the Swiss media for the last two weeks that both Credit Suisse and its rival UBS would announce the cull of hundreds, if not thousands, of jobs this autumn.

Having saved SFr2 billion by the middle of this year, Credit Suisse said it would add a further SFr1 billion by the end of 2013. On Thursday it announced another SFr1 billion to the savings programme by the end of 2015.

“We have realigned our business to better meet the demands of a changed regulatory and market environment and, in doing so, have substantially reduced risks,” said chief executive Brady Dougan in a statement.

Both Credit Suisse and UBS have been charged by the Swiss regulators with surpassing international standards on reducing risk and increasing stability. This summer, the Swiss National Bank piled on the pressure on both banks to act faster to meet these requirements.

Credit Suisse is already in the process of shedding 3,500 jobs – out of around 50,000 global employees – as it exits risky business lines. But the bank would not say how many more positions could go under the new savings plan.

But ominously, chief financial officer David Mathers said that it would be “unrealistic” to declare that no jobs would be affected.

Debt and private banking

Credit Suisse’s Q3 results were impacted by a SFr1.05 billion charge as the bank re-evaluated its own debt – an accounting requirement that measures the theoretical cost of buying back the debt.

Private banking brought in the largest share of profits (SFr689 million), but this figure was down 11 per cent on the same period last year. Investment banking improved its performance by around a third (SFr508 million), boosted by a further round of quantitative easing in the United States.

UBS will reveal its third quarter results next Tuesday, an event that will be followed closely by the media that has been predicting a savage round of job cuts.

Media reports that the group intends to substantially slash its global IT personnel have failed to produce a concrete denial from Switzerland’s largest bank.

But chief executive Sergio Ermotti was moved to issue a message to all staff following the assumed leak of strategic plans, denouncing unnamed individuals for speaking too freely.