ZURICH Credit Suisse (CSGN.VX) won't follow Swiss rival UBS UBSN.VX in winding down its fixed income business as it has a stronger position in the business, its chairman was quoted as saying.
"UBS has apparently decided that the prospects in this area are not very healthy for them and therefore is exiting this business. In this area, we have a different market position and therefore also a different view," Urs Rohner told the Basler Zeitung daily in an interview due for publication on Saturday.
"In the capital market areas in which we are active, we have a leading position," he said in the interview conducted jointly with Germany's Boersen Zeitung newspaper.
UBS announced last week it will slash 10,000 jobs as it winds down its fixed income business to return to its private banking roots, prompting speculation that Credit Suisse might have to consider similar steps.
Rohner said it was true that the financial crisis had shown that investment banks had operated with too high risks and too low capital levels, but rejected calls from some observers for Credit Suisse to completely exit the business.
"These people don't recognize that the capital market business is decisive for the functioning of efficient global markets and important for an internationally-oriented economy like Switzerland," he said.
Rohner said he did not expect Credit Suisse to profit from the UBS moves and said CS's investment bank was still too capital intensive, adding that negative earnings surprises seen in past quarters were not tolerable in the current environment.
Rohner reiterated his support for Chief Executive Brady Dougan, who came under fire earlier this year after the Swiss central bank called on Credit Suisse to boost its capital.
"There was and is no doubt about Brady Dougan. He has worked very successfully in recent years and is one of the most experienced CEOs in our sector," he said.
Earlier on Friday, Credit Suisse said it is to merge its retail and private banking arms in Switzerland from January, cutting 300 jobs to save 50 million Swiss francs ($53 million).
The restructuring is part of an extra 1 billion-franc cost-cutting campaign announced by Credit Suisse two weeks ago as it seeks to boost profits and strengthen its balance sheet.