Credit Suisse to cut 1,500 jobs after weak 3Q

GENEVA (AP) _ Credit Suisse Group announced Tuesday that it will cut about 1,500 more staff globally and reorganize its securities unit after reporting weak third-quarter net profits of 683 million Swiss francs ($785 million).

Switzerland's second-biggest bank said it will cut 3 percent from its 50,700 staff globally by the end of 2013 in a quarterly report that follows weak earnings across the banking industry this season due to low trading activity.

The results were a 12 percent improvement over a year ago in the same quarter when Credit Suisse reported exceptionally weak net profits of 609 million francs (then $621.4 million).

They were helped by an accounting gain from widening credit spreads, the bank said in a statement.

But analysts had predicted Credit Suisse might report earnings of about 900 million francs ($1 billion) or more this quarter.

“The performance was below our expectations,” chief financial officer David Mathers told reporters.

He said the “incremental 3 percent reductions” would fall evenly across divisions.

The staff reductions come on top of previous cuts announced in July when the bank reported it would eliminate more than 2,000 jobs after quarterly profits dropped by half, more than expected, due to a strong Swiss franc and a plunge in trading and investment banking earnings.

Chief executive Brady Dougan said the third quarter presented “a challenging environment with a high degree of uncertainty, low levels of client activity across businesses and extreme market volatility.”

Despite warning that these challenges could persist, he said the job cuts and other cost-savings and business strategies made the bank “well equipped for this environment” and give it “substantial opportunity for growth and stronger performance as economic and market conditions improve.”

The Zurich-based bank has yet to close the book on a U.S. tax evasion probe and announced that it had set aside 295 million francs in connection with that matter. It also said it had set aside 183 million francs (euros150 million) in connection with a German tax probe.