Swiss bank bounces back from losses
AFP · 29 Jul 2016, 08:15
Published: 29 Jul 2016 08:15 GMT+02:00
- Credit Suisse suffers first quarter losses (10 May 16)
- Credit Suisse to shed more jobs, slash costs (23 Mar 16)
- Credit Suisse hit by US penalty for 'dark pools' (01 Feb 16)
Plunging client activity and difficult market conditions as well as writeoffs pushed Switzerland's second largest bank into a net loss of 302 million Swiss francs in the first quarter.
The second quarter net profit still represented an 84 percent drop from the same period last year as Credit Suisse shifts to focus on private banking and wealth management.
The bank pointed to progress in cutting costs, which were down six percent from the second quarter last year, while it improved its core capital buffer to 11.8 percent.
"We were able to improve our performance in the second quarter and to operate profitably in a volatile context," said chief executive Tidjane Thiam.
He said markets were particularly challenging in June "in connection with the UK referendum on EU membership" but that their planning allowed for Credit Suisse to handle significantly increased trading volumes for its clients.
"We remain cautious in our outlook for the second half of 2016 in view of the uncertainty created by significant geopolitical and macro-economic concerns, reinforced a few weeks ago by the outcome of the UK referendum," added Thiam.
Investors initially appeared to cheer the results, with shares in the banking giant rising after opening but they later slid into the red and were just over three percent lower in early afternoon trades.
"One of Thiam's priorities is to make the bank run more efficiently, and this is the first time we witness that his strategy is finally bearing fruit," market analyst Andreas Ruhlmann, of IG Bank, said in an investors' note.
He said that, like other investment banks, Credit Suisse had benefited from higher trading volume on the days following the Brexit vote.
"This is a one-time event, and we would prefer to see rising profits in the Wealth Management business," he added.
Meanwhile, on Friday Swiss banking rival UBS said second quarter net profits slid by 14 percent to 1.03 billion Swiss francs (953
million euros) as economic uncertainty hit its activities.
But Switzerland's largest bank managed to beat analysts' expectations, who told the Swiss AWP agency they had expected the lender to post a figure of around 730 million francs.