Swiss bank Credit Suisse is cutting about 2,000 jobs after a second quarter hit by weak trading activity and the strong Swiss franc.
Net profit fell to 768 million Swiss francs ($958.9 million), the bank said on Thursday, below average analyst forecasts for 1 billion. Net new assets in private banking were 11.5 billion, below average analyst forecasts for 14.2 billion, informs Economic Times.
Investment banking has been hit by slow trading due to the debt crises in the euro zoneand United States as well as post-crisis regulations aimed at forcing banks to hold more capital to protect them from future shocks.
"We believe the trading environment has been difficult in Q2 for flow players like CS, particularly in FICC (fixed income, currencies and commodities) due to lack of client activity," JP Morgan analysts said in a note, estimating the bank's FICC revenues fell 55 percent quarter on quarter.
UBS and Credit Suisse face the added burden of high cost bases in Switzerland as the safe-haven franc soars, reports Reuters.
Earlier this week rival UBS unveiled plans to cut 2 billion Swiss Francs from its cost base following slow trading in fixed income, currencies and commodities.
Management are warning that current trading conditions, which have seen volatility high but client activity remain low, will be "persistent."
Credit Suisse said its exposure to Italian sovereign debt was just 400 million Swiss Francs, says CNBC.com.
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