Credit Suisse Dumps Commodities Trading To Boost Capital 'Efficiencies'

Credit Suisse CS will exit commodities trading and in the process shed assets of $8 billion.

The $878.09 billion investment bank announced the move as it swung to a second-quarter loss on a $2.6 billion legal settlement with U.S. tax authorities.

In addition to lowering its assets, abandoning its commodities unit will lower leverage exposure by $25 billion. Both results should reduce the bank's U.S. regulatory capital and reserve requirements.

The company's leverage exposure is currently $1.28 trillion versus its target of $1.11 trillion.

Credit Suisse also said it expects the action will save $200 million in expense and boost its capital and operating efficiencies.

Elsewhere within the company, it said the wind-down of non-strategic units has resulted in a $3 billion reduction in leverage exposure and a $6 billion reduction in risk-weighted assets.

Credit Suisse also said it's on track to meet a standing goal of cutting about $5 billion from expense by 2015.

The company had previously discussed spinning off its commodities business in a joint venture with Glencore plc, an Anglo–Swiss commodity trading and mining company. Discussions fell through in 2010 after the realization that credit costs for the business operating independently of Credit Suisse would have been prohibitive.

Credit Suisse traded recently at $28.59, down 1.6 percent.