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Reuters: Credit Suisse cuts 1,500 jobs, shrinks investment bank

In a second round of streamlining initiatives, the Swiss bank claims that the cuts should bring annual cost savings of 2 billion francs ($2.24 billion) by 2013, according to Reuters news service. The move comes ahead of strict new regulations and disappointing third-quarter results. 

Tuesday, November 1, 2011
Tuesday, November 1, 2011

Nov. 1/11 (Reuters) — Credit Suisse (CSGN.VX) will cut another 1,500 jobs and scale back its capital-guzzling investment banking business as it seeks to meet tough new regulations ahead of other banks after the unit reported disappointing third-quarter results.

The job losses come on top of 2,000 cuts announced by the Swiss bank in July out of a total of about 50,700. The cuts, which amount to 7 percent of its global workforce, should bring annual cost savings of 2 billion francs by 2013, the bank said on Tuesday.

Banks are shedding jobs as strict capital rules aimed at shielding them from future financial crises and a tough third quarter for trading income take their toll on investment banking divisions in particular.

Japan’s Nomura Holdings (8604.T), which posted its first quarterly loss in 2-1/2 years on Tuesday, also increased its cost cutting target.

Credit Suisse Group AG shares traded 8.2 percent lower at 23.51 francs by 1139 GMT, compared with an 8.6 percent drop in European banks as a whole .SX7P after Greece called a referendum on the eurozone bailout deal.

Analyst Dirk Becker at brokerage Kepler said the results were worse than those of UBS (UBSN.VX) and Deutsche Bank (DBKGn.DE), although Credit Suisse still traded at one of the highest valuations among European banks.

“We downgraded Credit Suisse in August after a string of disappointing results and amid still relatively high valuation. We confirm this view now,” he said in a note.

The cuts will further reverse Credit Suisse Chief Executive Brady Dougan’s post-crisis hiring spree focused on fixed income, the area hit most by the market downturn this year.

Dougan, who admitted the quarter had missed the bank’s expectations, told Reuters Insider television the cuts would hit all regions and units, including its private bank.

“We’re ahead of the curve versus our peers who still face many of these challenges,” Dougan told a news conference.

This is an excerpt from Reuters as it appeared on November 1, 2011. For updates or to read the current version of this post in its entirety, please click here.

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Compared to its neighbours, The Bahamas is performing relatively well in economic terms due to lower debt levels and strong fiscal policy, according to the International Monetary Fund. Construction projects, gradual recovery in tourism drive muted, but sustained growth. Pictured: Miguel Savastano (left), deputy director of the IMF’s Western Hemisphere Department and Gene Leon, the IMF’s senior resident representative in Jamaica and Mission Chief for The Bahamas.

US civil litigation expert warns that increased regulation means that the law in the US relating to securities and asset recovery is changing, which could have far-reaching implications for offshore financial centres.

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