Swiss Bank Corp. will reduce its U.S. staff by 10% before yearend as part of a restructuring of its American operations.

The cutback will result in the loss of 200 jobs.

In a statement, the bank said that although jobs will be lost in the short run, it is increasing its commitment to the North American marketplace and expects the head count to increase in future years.

Swiss Bank added that it is increasing capital markets, treasury, corporate finance, private banking, and funds management activities.

Functional Approach

A spokeswoman in New York said the job cut is aimed at realigning the organization to functional from regional lines.

The bank said it has combined corporate and merchant banking units into a single entity, the North American merchant banking group. It is also integrating support functions.

The bank said it will concentrate its West Coast client coverage at its San Francisco office. It plans to close the Houston office by the end of the third quarter.

"It's part of a reorientation from fairly basic commercial banking activities to something with a more merchant banking emphasis." said Bryan Crossley, a London-based analyst with Hoare Govett. "They're trying to beef up securities-related activities, including trading and investment banking."

A Time of Adjustment

"They've got a lot of tightening up to do, and they know it," added Christopher Davis, an analyst with Barclays de Zoete Wedd in London. "The days of doing large-volume, low-margin commercial banking are out."

Swiss Bank, with $18.5 billion in U.S. assets has expanded investment banking and capital-markets-related operations.

It is expected to speed up the restructuring in light of mounting problem loans and recent changes in the bank's management in Switzerland.

Over the past few years, the Basel-based bank has been forced to set aside large reserves to cover problem real estate lending in New York as well as loans to Canadian real estate giant Olympia & York developments and to R.H. Macy & Co.

The bank also has about $100 million in exposure to Ireland's financially troubled GPA Group, the world's largest aircraft leasing company.

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