THE Credit Suisse First Boston (CSFB) investment banking brand will be dropped after its Swiss owner announced plans to merge the unit with the rest of its banking operations.

The move, which is part of a drive to boost profits by focusing on higher margin services such as derivatives, leveraged finance and commodities, will result in up to 300 job losses at CSFB. Credit Suisse will also continue with its consultancy businesses, which advise on merger and acquisitions and initial public offerings.

The bank also announced plans to float its Winterthur insurance business in a bid to increase profitability. The bank hopes that folding the 72-year-old CSFB brand into the main group will help it survive as an independent player in a rapidly consolidating, but low-growth industry.

Oswald Grübel, the chief executive of the bank, said: “This change means we want to present one face to our clients.”

Brady Dougan, the chief executive of CSFB, yesterday promised to report investment banking net income of SwFr 3 billion (£1.4 billion) and a return on equity of more than 20 per cent in 2007. This compares to a net income of SwFr 1.1 billion in 2003 and a return on equity of 9.6 per cent.

Mr Dougan said: “I know we have a lot of challenges. We have underperformed financially, plain and simple.”

He said that the “performance gap remains significant” between CSFB and its investment banking rivals and pointed to the group’s share price performance as recognition that investors “place very little value on CSFB”.

Credit Suisse’s shares have fallen 6 per cent in the past year, compared to UBS, its chief rival.

Mr Dougan added that he hoped to boost profits by increasing CSFB’s level of risk through more proprietary trading. CSFB has been taking about 80 per cent of the risk of its key competitors.

The move is a reversal of the strategy favoured by Mr Dougan’s predecessor, John Mack, who was ousted in June. Mr Mack, who was joint chief executive of the group as well as head of its investment bank, had reduced risk because it made the company’s earnings more volatile.

Credit Suisse said yesterday that Winterhur, the business it bought in 1997 for about $10 billion, would be floated as soon as its profits had increased. The bank decided to float the business after failing to get an acceptable offer from potential buyers.

Credit Suisse would not put a value on Winterhur but analysts say it is worth about $9 billion (£4.6 billion).

A spokesman for Credit Suisse yesterday said: “At this point in time, the market is not prepared to pay an adequate price for what we believe is the full value of Winterhur.”

Credit Suisse hopes that its new strategy to focus on higher margin services will build on last year’s return to profits from hefty losses in 2002, when weak stock markets coincided with the bank’s ambitious expansion plan.

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