Zurich: Credit Suisse said that it would exit its subscale commodities trading business and further trim other parts of its investment bank, after posting a SFr700 million net loss in the second quarter.

The loss, which compared with a profit of SFr1.05 billion a year ago, was mainly due to a SFr1.6 billion charge that the Swiss bank took to fund a $2.6 billion settlement with US authorities, after admitting in May that it had helped clients evade taxes.

The US settlement resolved one of the largest and longest-standing uncertainties hanging over Switzerland’s second-largest bank by assets, but with the US fine paid, market attention has returned to the strategic direction of Credit Suisse’s investment bank.

Some analysts have called on the bank’s chief executive, Brady Dougan, to make radical changes to its fixed income, currencies and commodities operations (FICC), an area of banking which was once a big source of profits, but which has been hit by subdued markets and tougher regulations in the wake of the financial crisis.

Credit Suisse has resisted calls for a full-scale retreat, but said last autumn that it would slash its underperforming interest rates trading business by 40 per cent, and today joined the growing exodus of investment banks from commodities trading.

In recent months even some banks with big commodities arms, such as Barclays, as well as a host of smaller players, such as UBS, have made for the exit.

Credit Suisse said that it would also make further cuts to its rates business, and “refocus” its foreign exchange operations to concentrate on “a combination of electronic trading and voice offering for larger and more complex trades”.

Despite the broader pressures on fixed income trading, the second quarter has been less disappointing than feared for many banks, with the likes of JPMorgan and Goldman Sachs, two of Wall Street’s biggest debt traders, respectively posting smaller-than-expected 15 and 10 per cent declines in FICC revenues.

Credit Suisse did better, with revenues from fixed income sales and trading up 14 per cent on the second quarter of last year. However, a 15 per cent decline in equities revenues meant that, overall, the division’s profits came in more or less the same as a year earlier at SFr752 million.

Credit Suisse’s private bank, which was the source of the US’s tax evasion investigation, made a loss of SFr749 million, down from a profit of SFr917 million in the same period last year. However, the division, which provides banking services to the wealthy, saw a pick-up in inflows, attracting SFr10.1 billion in net new money.

Dougan reiterated that Credit Suisse “deeply regret[ed]” its past misconduct and said that the bank was “on track” to boost its core tier one capital ratio — a key measure of a bank’s financial strength — to over 10 per cent by the end of the year.

The ratio, which was hit by Credit Suisse’s US fine stood at 9.5 per cent at the end of the second quarter.