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Credit Suisse to start fixed income job cuts Thursday

LONDON, Nov 12 (IFR) - Credit Suisse is expected to start a round of 100 job cuts in London starting Thursday, predominantly in the fixed income rates and foreign exchange segments, according to several market sources.

The move is part of a larger drive to cut some 2,000 roles in London.

The Swiss bank would shed 1,800 back office jobs and also look for “a little bit of efficiency in the front office,” chief executive Tidjane Thiam told investors on October 1.

The bank has given up its role as primary dealer in all European government bond markets, and the axe is expected to fall hard on related sales and trading operations.

Acting as a primary dealer in government bonds is prestigious, allowing banks to take part in auctions and serving as an entree to more lucrative work in debt syndications.

But tougher regulation since the financial crisis has made it less profitable for banks due to the extra capital they now have to hold against possible losses.

“Approximately 200 roles are set to be cut and in this particular round starting today it will be round about 100,” said one person with knowledge of the matter.

“The bulk of those will be in fixed income and in the global macro products division of the fixed income team.”

The global macro products division at CS comprises the rates, foreign exchange, precious metals and investor products.

Two other market sources suggested CS would likely also make cuts to its debt capital markets team covering sovereigns, supranationals and agencies.

“There is no need for them to keep a full DCM and syndicate team since they have given up primary dealerships; expectations of business when you drop primary dealerships are quite low,” said one banker covering public sector debt.

A second agreed, saying that the SSA trading team is now down to one person, who could also be at risk. “How do you do primary business without a trader?”

There are currently five members in the SSA DCM team, he said, whose situation is likely precarious.

The cuts will be made to the European business. CS has retained its primary dealership in US Treasuries and its US business is set to remain intact, said the first source. (Reporting by Abhinav Ramnarayanm, editing by Alex Chambers, Julian Baker)

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