Credit Suisse cuts 500 more jobs

Credit Suisse makes a final step in restructuring private banking to help boost earnings. Credit Suisse Group

A further 500 jobs are to go at Credit Suisse Financial Services as part of the bank's restructuring of its private banking operations.

The cuts are in addition to the 700 to 800 reductions that Credit Suisse announced last year. The bank said they would mainly affect support functions and would be achieved through natural wastage by the end of 2003.

Credit Suisse said in a statement that the move should boost the bank’s earnings by SFr100 million ($64 million), above the previously targeted increase of SFr600 – SFr650 million.

The cuts are the last step in the bank’s restructuring, which has seen its retail and private banking arms brought under the umbrella of financial services.

Credit Suisse has said it intends to draw a clearer line between retail banking and its high-margin private banking business, which is aimed at clients with at least SFr250,000 to invest.

Consolidation

Credit Suisse’s interest in private banking, along with that of other giants such as UBS, is increasing pressure for consolidation among Switzerland’s smaller private banks.

Earlier this month, the country’s two oldest private banks, Lombard Odier and Darier Hentsch of Geneva, announced they are to merge, creating a new institution with combined assets of SFr140 billion.

Analysts said they needed a merger because both were too big to be niche players and too small to compete with rivals such as Credit Suisse whose private banking unit has SFr756 billion under management.

Takeover speculation continues to surround many smaller Swiss banks, including Bank Vontobel, which is thought to be seeking a merger partner. Earlier this year, the Basel-based Bank Sarasin sold a 28 per cent stake to Rabobank of the Netherlands, in what analysts say is a prelude to an eventual takeover by the Dutch bank.

swissinfo with agencies