Credit Suisse reports big jump in net profit

Credit Suisse, Switzerland's second-biggest bank, said on Thursday that its net profit soared in the third quarter as it makes progress with an ambitious restructuring and cost-cutting programme.

Credit Suisse reports big jump in net profit
Fabrice Coffrini/AFP

The bank said in a statement that its bottom-line net profit amountedto 244 million Swiss francs ($244 million) in the period from July to September, up from 41 million Swiss francs a year earlier.

Revenues, however, fell by eight percent to 4.972 billion Swiss francs, it said.

Credit Suisse has embarked on a massive restructuring programme since Tidjane Thiam took over as chief executive in 2015.

And the group said it has made headway with its programme to bring down operational expenditure to below 18.5 billion Swiss francs by the end of the year.

In the July-September period, the bank made additional cost cuts of 400 million Swiss francs, it calculated.

“Our third-quarter results demonstrate the progress we are making,” CEO Thiam said.

But he acknowledged that client activity remains “muted” as “uncertain geopolitical developments, central bank policies and the magnitude and timing of reforms in the US, as well as historically low levels of volatility” have left their mark on business.

“In addition, activity levels in the third quarter of 2016 were unusually strong due to the combination of the effects of Brexit and the US elections,” Thiam added.

Looking ahead to the rest of the year, Credit Suisse said it expects global economic growth to remain strong overall in the fourth quarter, “which could be a significant tailwind for our activities in spite of continuing geopolitical uncertainty”.

“After seven quarters of our three-year plan, we remain firmly focused on delivering against our objectives for both business growth and efficiency improvement,” the statement said.


Credit Suisse slashes jobs, branches to move ‘online’

Credit Suisse, Switzerland's second-biggest bank, said Tuesday it would reorientate its domestic services towards digital banking, with a quarter of its Swiss branches to close and hundreds of jobs at risk.

Credit Suisse slashes jobs, branches to move 'online'
A Credit Suisse branch. Photo: FABRICE COFFRINI / AFP

“In the last two years alone, use of online banking at Credit Suisse has grown by approximately 40 percent, while the use of mobile banking has more than doubled,” the bank said in a statement.

“The COVID-19 crisis has further accelerated these trends. In contrast, the number of visits to branches has been declining for years.

“Credit Suisse will introduce a new digital offering and a future-oriented branch concept at the end of October.”

The bank also plans to merge the activities of regional subsidiary Neue Aargauer Bank with those under the Credit Suisse brand to avoid duplication.

READ: How to open a bank account in Switzerland 

With its realignment, the bank intends to reduce annual costs by around 100 million Swiss francs ($110 million, 93 million euros) from 2022 onwards. It plans to cut the number of bank branches from 146 to 109.

Meanwhile up to 500 jobs could be axed, Andre Helfenstein, head of the bank's operations within Switzerland, told reporters during a conference call.

The restructuring costs are expected to be 75 million Swiss francs. “Digitalisation is happening all around us,” Helfenstein said in a statement.

“The changes we are making to our branch network — while simultaneously investing in digital solutions and in advisory services for clients with more complex needs — represent a logical step forward.”

In late July, the bank's new chief executive Thomas Gottstein unveiled his plans for Credit Suisse, which involved regrouping its different investment bank activities.

Gottstein took charge in February after Tidjane Thiam was ousted over a massive spying scandal.