C.Suisse to cut 5,300 jobs after $2.5 billion loss

By Lisa Jucca

ZURICH (Reuters) - Swiss bank Credit Suisse (CSGN.VX) said on Thursday it was cutting 11 percent of its workforce, or 5,300 jobs, as it revealed it made a net loss of about 3 billion Swiss francs ($2.5 billion) in October and November.

The bank said the loss, primarily in investment banking, where most of the job cuts will fall, was due to adverse market conditions and to the cost of reducing risk.

On the brighter side, Credit Suisse said that in November alone it was modestly profitable, and it also said its private banking segment was still seeing asset inflows and had hired 370 relationship managers this year, helping a rebound in shares.

The job cut announcement comes on the same day as Japan's Nomura Holdings (8604.T) said it was firing 1,000 bankers in London. More than 100,000 jobs have been lost in the financial industry since September.

"These actions will better position us to weather the continuing challenging market conditions, capture opportunities that arise amid the continuing disruption, and prosper when markets improve," Chief Executive Brady Dougan said.

Dougan said the investment bank would be leaner as it would exit certain proprietary and principal trading activities as well as origination capacity in some complex businesses.

"Investment banking is going back to basics and to the boring business," said Dirk Hoffmann-Becking, a senior analyst with Bernstein Research. "Quite a lot of the frills is going."

The bank will take a restructuring charge of 900 million Swiss francs, mostly in the fourth quarter, pointing to a total quarterly loss of about 4 billion Swiss francs, analysts said.

Having fallen 9 percent on Wednesday, Credit Suisse shares reflected the positives, climbing nearly 7 percent to 29.60 Swiss francs by 1150 GMT, while the DJ Stoxx index of European banking stocks .SX7P was up 1.44 percent.

"The good news is that the loss occurred in October, and in November the bank was already profitable," said Georg Kanders, an analyst with WestLB.

"The company is not sitting still; they are carrying out a cost reduction. It is impressive how they have reduced risk, and they say they have quite good net new money."

NO GOVERNMENT HELP NEEDED

Traders say investors have looked more critically at Credit Suisse since the Swiss state bailed out rival UBS (UBSN.VX), which has made more write-downs than any other European bank.

When the rescue package for UBS was announced in October, Credit Suisse said it did not need government help, and Dougan told a conference call he did not foresee any circumstances in which the bank would need such help.

Echoing a similar move at UBS, the bank also said that, given its performance to date, "it would not be appropriate" for its chairman, its chief executive officer and the head of its investment bank to receive bonuses for 2008.