Published October 25, 2012
ZURICH – Credit Suisse said on Thursday it would target an extra 1 billion Swiss francs ($1.07 billion) of cost savings by 2015 after third-quarter net profit shrank by more than half.
Credit Suisse said it was now targeting 4 billion francs in cost savings by 2015, from a target of 3 billion franc it set in July, a figure it had already lifted from an earlier 2 billion.
The bank, which is already in the process of cutting 3,500 staff or 7 percent of its workforce, did not say how many job cuts would be involved to reach the additional cost savings.
The Zurich-based bank reported net profit fell 63 percent to 254 million francs, missing average analyst forecasts for 370 million francs. The quarter was hit by 1.048 billion francs in charges, mainly from its own debt.
Banks can record gains if the value of their debt falls, since it becomes theoretically cheaper to repurchase it, and book losses if the value of the debt rises.
The bank, which put aside $325 million in the third quarter of 2011 to settle a U.S. tax investigation, said it could not give any information on when it might reach a deal. It did not see any direct impact on its ability to generate asset inflows.
The Swiss government is negotiating with the U.S. government to try to get investigations against 11 banks dropped in return for expected hefty fines and the transfer of names of clients suspected of evading taxes.
Credit Suisse is selling prime Swiss real estate, issuing convertible bonds and slashing spending, part of a raft of measures announced in July aimed at raising capital by 15.6 billion francs ($16.72 billion) after urgings by the Swiss central bank.
Credit Suisse said it is looking to sell its exchange-traded funds business as part of its restructuring, confirming a recent Reuters report, but said it did not plan further divestments within asset management.
Credit Suisse also reiterated a return-on-equity target of more than 15 percent "over the cycle". Credit Suisse's ROE stood at 2.9 percent in the third quarter.
($1 = 0.9329 Swiss francs)
(Reporting By Katharina Bart; Editing by Hans-Juergen Peters)
(This story rewrites the sixth paragraph to show the $325 million was set aside in Q3 2011, not Q3 2012.)