Hans-Ulrich Meister had been made chief executive of private banking, with existing CEO Walter Berchtold moving to the role of chairman, the bank said today. Meister’s new role as CEO is in addition to his role as CEO for Credit Suisse Switzerland, the bank said. Meister has been at Switzerland’s second largest bank since 2008.

“In his new position Walter Berchtold will focus on further growing our strategically important business with UHNW clients globally, and will work closely with divisional and regional CEOs helping build our integrated model and expanding our global footprint. Walter Berchtold and Hans-Ulrich Meister are members of the executive board of Credit Suisse and report to Brady Dougan,” the bank said.

In a conference call with journalists this morning, Dougan said that although Meister will "put his own stamp on the business, the private bank's strategy will not markedly change."

Confirming recent press speculation that the bank is to cut jobs, Credit Suisse said that in order to make SFr1 billion of cost savings, it will reduce total headcount across all its divisions by 4 per cent, and the measures will cost around SFr400 million to implement in 2011. 

On the conference call, David Mathers, chief financial officer at the bank, said the cuts would be predominantly focussed on the investment bank, and 500 of those would be made in Switzerland. 

“As a result of these implementation costs the programme will provide for limited net savings in 2011 with the full benefits of the initiatives expected to be realised during 2012,” the bank said. At a group level, Credit Suisse reported underlying pre-tax income of SFr1.2 billion, underlying net income of SFr835 million and an underlying return on equity of 10 per cent for the second quarter. It also announced that investment banking profits slumped in the second quarter.

In its results, Credit Suisse said that private banking, which comprises the global wealth management clients business and the Swiss corporate and institutional clients business, was affected – like rivals UBS, EFG and Julius Baer – by the strengthening of the Swiss franc against the euro and dollar. Excluding the foreign exchange impact, income before taxes actually rose by 20 per cent in the second quarter and net revenues increased by SFr100 million or 3 per cent over the same period a year ago.

Net revenues were driven by a 10 per cent decline in net interest income and a 7 per cent decline in transaction-based revenues. The reduction in net interest income reflected the adverse foreign exchange translation impact and the continued low interest rate environment.

Transaction-based revenues decreased primarily due to substantially lower brokerage and product issuing fees and lower foreign exchange income from client transactions, reflecting very low levels of client activity during the quarter, partially offset by gains from the sale of real estate. Total operating expenses fell because of the strong Swiss franc and declines across most expense categories.

The wealth management clients business reported income before taxes of SFr595 million in the second quarter, down 6 per cent, as lower net revenues were partially offset by lower total operating expenses.

In the investment banking side, this division reported income before taxes of SFr231 million, down 71 per cent compared to the same quarter a year ago and down 83 per cent from the previous quarter. “Results in 2Q11 were significantly impacted by difficult trading conditions and weaker client activity triggered by European sovereign debt concerns, widening credit spreads and deteriorating economic indicators, particularly in the US,” the bank said. Like private banking, the investment bank was hit by the effects of the strong Swiss franc.

Earlier in July, Credit Suisse named Marcel Kreis as chairman of private banking Asia-Pacific and Francesco de Ferrari as head of private banking Asia-Pacific from 1 January next year.

Less positively, Credit Suisse is being investigated by the US Department of Justice as part of a broader industry inquiry. The investigation concerns historical private banking services provided on a cross-border basis to US persons, and the bank received a letter notifying it that it was also being investigated.

When asked about the investigation, Dougan said: "We will work very hard to get a resolution on this over time."