Credit Suisse will cut another 1,500 jobs and scale back its capital-guzzling investment banking business as it seeks to meet tough new regulations ahead of other banks after the unit reported disappointing third-quarter results.

The job losses come on top of 2,000 cuts announced by the Swiss bank in July out of a total of about 50,700. The cuts, which amount to 7 percent of its global workforce, should bring annual cost savings of 2 billion francs by 2013, the bank said on Tuesday.

Banks are shedding jobs as strict capital rules aimed at shielding them from future financial crises and a tough third quarter for trading income take their toll on investment banking divisions in particular.

Japan's Nomura Holdings, which posted its first quarterly loss in 2-1/2 years on Tuesday, also increased its cost cutting target.

Credit Suisse Group AG shares traded 8.2 percent lower at 23.51 francs by 1139 GMT, compared with an 8.6 percent drop in European banks as a whole .SX7P after Greece called a referendum on the eurozone bailout deal.

Analyst Dirk Becker at brokerage Kepler said the results were worse than those of UBS and Deutsche Bank, although Credit Suisse still traded at one of the highest valuations among European banks.

We downgraded Credit Suisse in August after a string of disappointing results and amid still relatively high valuation. We confirm this view now, he said in a note.

The cuts will further reverse Credit Suisse Chief Executive Brady Dougan's post-crisis hiring spree focused on fixed income, the area hit most by the market downturn this year.

Dougan, who admitted the quarter had missed the bank's expectations, told Reuters Insider television the cuts would hit all regions and units, including its private bank.

We're ahead of the curve versus our peers who still face many of these challenges, Dougan told a news conference.

ACCOUNTING GAIN

The Credit Suisse announcement steals some of the thunder from rival UBS which is expected to announce a similar overhaul of its investment bank at an investor day on November 17 and more job cuts on top of the 3,500 it announced would go in August.

CS said net profit rose 12 percent to 683 million francs, missing a Reuters poll estimate for 1.1 billion, while underlying net profit was 441 million.

In line with other banks this quarter, the Credit Suisse numbers were flattered by a 1.34 billion franc accounting gain on the value of its own debt -- which occurs because the bank could profit from buying back its own bonds at lower levels.

The investment bank unit reported a pretax loss of 190 million -- its first loss since the last quarter of 2008 -- against a 231 million profit in the second quarter, as it was hit by challenging market-making conditions and continued low client activity as the macroeconomic climate deteriorated.

Dougan, the former boss of the CS investment bank, predicted that subdued economic growth and the low interest rate environment and increased regulation would persist. We may well continue to see ... low levels of client activity and a volatile trading environment.

Net new assets in private banking were 7.4 billion francs, also missing an average analyst forecast for 9 billion.

Credit Suisse said it had taken a provision of 295 million francs for settling a U.S. investigation into its activities in helping wealthy Americans dodge tax. The probe is continuing although the provision suggests a deal could be near.

The bank, which said the ultimate resolution of the proceedings might exceed the current provision, also took a provision of 183 million francs for a German fine to settle a separate tax investigation it had announced in September.

The bank said it was responding to new capital rules by targeting a 50 percent cut in risk-weighted assets in fixed income by 2014 and planned to more closely align investment banking with its private banking and asset management units.

The bank said activities under the knife include trading in long-dated unsecured assets in the global rates, emerging markets and commodities units, as well as the commercial mortgage backed securities loan-origination desk.

The restructuring represents the largest pullback by Credit Suisse since 2008, when the bank pledged to largely exit proprietary trading to cut risk. Since then, it has slashed risk-weighted assets by 22 percent to 210 billion francs.

Overall we were pleased about the restructuring headlines, JP Morgan analysts wrote in a note. We welcome the refocus on core strength and the reduction in the FICC franchise.

It also plans an efficiency drive at its private bank aimed at increasing its contribution to group pretax income by 800 million francs, excluding market induced growth, by 2014.

The strong Swiss currency hit pretax income to the tune of 277 million francs in the quarter. Dougan said he was pleased the franc had been more stable in the quarter but said he expected more foreign exchange volatility to come.

The bank said it would allocate more resources to faster growing markets such as Brazil, southeast Asia, greater China and Russia, which it expects will account for a quarter of group revenue by 2014 from 15 percent now.