(In penultimate paragraph, corrects 2018 CET1 target to 12-13 pct from 11-12 pct)
* Credit Suisse investor day on Wednesday
* Raises planned net cost savings to more than 4.2 bln Sfr
* Cuts profit targets for Asia-Pacific, wealth management
* Lowers 2018 CET1 ratio target to 12-13 pct from around 13 pct
By Joshua Franklin and Brenna Hughes Neghaiwi
ZURICH, Dec 7 (Reuters) - Credit Suisse pledged to cut another 1 billion Swiss francs ($991 million) in costs and pared back profit targets amid challenging markets which have made it harder for banks to make money.
Just over a year since Chief Executive Tidjane Thiam laid out his strategy for Switzerland's second-biggest bank, analysts had expected Credit Suisse to take another axe to costs and lower expectations which had long been viewed as too optimistic.
"We have seen major challenges in the market environment and political outlook which have negatively impacted the market-dependent portion of our targets," Thiam, who took over at Credit Suisse in July 2015, said in a call with reporters.
Negative interest rates, political uncertainty, increased regulation and sluggish economic growth have squeezed banks' profitability.
This has complicated Thiam's restructure, which has refocused the bank more towards wealth management and less on volatile investment banking.
In a statement ahead of its investor day, Credit Suisse lowered its operating cost base target for 2018 to below 17 billion francs from below 18 billion francs.
It also increased planned net cost savings target to more than 4.2 billion francs by end-2018 from 3.2 billion.
"This is in line with our expectations," Deutsche Bank analysts, who rate the stock "hold", said in a note.
As expected, Credit Suisse lowered 2018 pre-tax income targets for its Asia Pacific and International Wealth Management (IWM) divisions to 1.6 billion and 1.8 billion francs, respectively. The previous target for both divisions was 2.1 billion francs.
The cuts were due to weaker trading in Asia-Pacific and falling asset management performance fees.
It confirmed a 2018 target of 2.3 billion francs at its Swiss business, which it plans to partially list next year.
"The targets were just overly ambitious," said Vontobel analyst Andreas Venditti. "The targets are still ambitious but maybe less unrealistic."
Despite Credit Suisse's Asia Pacific division now having the lowest profit target across its three regional units, Thiam said its focus on the region will pay off eventually.
The shares, which had lost around a third of their value so far this year, were up 5 percent at 15.04 francs by 0849 GMT.
Wednesday marks the second time in less than 10 months Thiam has adjusted his plans. Back in March, the bank said it would shave an additional 800 million francs off costs and cut 2,000 more jobs from its trading division.
Thiam did not say how many additional layoffs there will be to the 6,000 already planned for 2016, adding that it had already exceeded this target with a reduction of 6,050.
Newspaper Schweiz am Sonntag had reported Credit Suisse would announce a further 1,000 to 1,300 lay-offs at its Swiss business.
Credit Suisse also lowered its end-2018 target common equity Tier 1 capital ratio, a measure of balance sheet strength, to 12-13 percent from approximately 13 percent.
The investor day in London will be webcast from 0830 GMT.
$1 = 1.0091 Swiss francs Editing by Michael Shields and Louise Heavens