Credit Suisse to cut costs after Q3 profit slump

GENEVA (AP) ? Credit Suisse Group said Thursday it is to cut costs further as it posted a 63 percent fall in third-quarter profit following an accounting charge on its debt.

Switzerland's second-biggest bank, which is already shedding 7 percent of its workforce, or about 3,500 employees, did not provide details on how many more jobs would be targeted as part of plans to cut an additional 1 billion Swiss francs ($1.07 billion) in costs in 2014 and 2015.

Those reductions are to come on top of the 3 billion francs in previously announced cost-cutting measures the Zurich-based bank plans to have achieved by the end of next year.

The plans were announced as the bank reported net profit of 254 million Swiss francs ($272 million) between July and September, compared with 683 million francs ($785 million) in the comparable period of 2011.

The bank attributed the decline to a pretax charge of 1.05 billion francs ($1.12 billion) linked to an accounting rule on how banks must value their debt. Banks can post gains if the value of their debt falls, because it would theoretically become cheaper for the bank to repurchase that debt. But the rule also says that when a bank's debt increases, it must take a write-down because it would theoretically have to pay more to buy back its own debt on the open market.

Credit Suisse also said most of its credit risk is linked to its private and investment bank, adding that its exposure to Greece, Ireland, Italy, Portugal and Spain rose to ?4.2 billion ($5.5 billion) from ?3.9 billion three months earlier.

Chief Executive Brady Dougan said the bank is successfully implementing cost-saving measures it began last year and substantially reducing risks while realigning business and improving its capital cushion to meet regulatory and market demands.

"At the same time, we have significantly cut costs and improved efficiencies across the bank," he said.

Shares in Credit Suisse closed at 21.33 francs Wednesday, down 2.6 percent since the start of the year.

Source: http://news.yahoo.com/credit-suisse-cut-costs-q3-profit-slump-072303740--finance.html

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