GENEVA (AP) — Credit Suisse Group posted Thursday an unexpectedly small rise in third-quarter profits due mainly to weak results in its investment banking unit, sending shares down almost 3 percent.
Switzerland's second-largest bank, which has shed thousands of employees in cost-cutting drives to boost profitability, reported a third-quarter profit of 454 million Swiss francs ($509 million), up from 254 million francs between July and September 2012. Analysts were expecting 671 million francs.
The bank's stock dropped by 2.8 percent to 29.00 francs Thursday on the Zurich exchange. The Zurich-based group said net revenue in the investment banking division fell 20 percent from a year earlier, to 2.55 billion francs.
Chief Executive Brady Dougan said the bank had seen "challenging market conditions, characterized by low levels of client activity across many of our businesses." Revenue in private banking and wealth management was 3.32 billion francs, roughly in line with the comparable quarter a year earlier, when it had suffered a sharp drop.
Credit Suisse said it had trimmed its worldwide staff to 46,400 by the third quarter, down 4 percent from 48,400 a year earlier. Compensation and benefit costs for employees fell to 348 million francs, down 24 percent from a year earlier, while the bank spent less for bonuses.
The bank said it had cut costs by 3 billion francs out of a total 4.4 billion francs it had planned to cut — and announced it would raise that target to 4.5 billion francs. Credit Suisse also has continued to improve its capital cushion and lower exposure to risks, he said, in line with new international and Swiss banking rules.
Credit Suisse and Switzerland's biggest bank, UBS AG, are major financial institutions that are on the list of 29 "global systemically important banks" that are considered too economically important to be allowed to fail.