Credit Suisse cuts 1,250 jobs

Credit Suisse Group yesterday rang up record losses, cut another 1,250 jobs, slashed its dividend and warned it may have to trim its payroll further unless prospects improve.

Overall the financial group lost SFr3.3bn (£1.6bn) last year, compared to a profit of SFr1.6bn in 2001 as a swingeing 22 per cent cut in costs failed to keep pace with a 28 per cent drop in revenues.

The group said yesterday that it is cutting some 900 jobs at its financial services arm - mainly in private banking in Switzerland - and another 350 by merging the head offices of its life and pensions business with its Winterthur insurance business.

The group has already cut 6,400 jobs at its Credit Suisse First Boston investment bank and yesterday group joint chief executive John Mack warned there could be more to come.

"We need to understand what is going to happen over the course of the year given the geopolitical problems facing the world. If that has a dramatic impact on our business ... all firms will have to look at their head counts again."

As Credit Suisse Group was unveiling its latest cuts, Germany's second largest listed bank, HVB, was reported to be planning to axe 1,000 jobs. The bank declined to comment but industry sources confirmed the job losses as part of a 250m euros cost reduction programme.

Among the factors pushing Credit Suisse into the red were exceptional fourth quarter charges of SFr1.5bn - including SFr702m against private litigation over analyst independence, the Enron collapse and the way shares were allocated in a number of initial public offerings as well as SFr234m against an agreement with US regulators over analyst research and IPO related issues.

Credit Suisse said yesterday that though it remained "cautious" about the outlook for the current year it said that it expected the measures it had already taken last year and those just announced "will restore profitability" in 2003.

The other joint chief executive Oswald Grübel acknowledged that he and Mr Mack face a challenge in convincing investors the bank will be able to deliver promises. "We need to increase our credibility. John [Mack] and I have to prove this year that, regardless of the market environment, we can achieve a net profit and strengthen our capital basis."

Meanwhile the dividend has been slashed from SFr2 in 2001 to a token SFr 0.1 for 2002.