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Banking: Credit Suisse profit soars as overhaul pays off

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Banking: Credit Suisse profit soars as overhaul pays off
Photo: AFP
11:04 CEST+02:00
Swiss banking giant Credit Suisse on Wednesday posted a big jump in net profit for the first quarter, as a major overhaul under way since 2015 delivers firm results.

The bank, Switzerland's second biggest after UBS, began to refocus its activities on wealth management over merchant banking.

Read also: Bullish UBS posts strong first quarter results

The revamp, launched after French-Ivorian businessman and former politician Tidjane Thiam took the reins as CEO in 2015, has also involved a "relentless focus on efficiency", Credit Suisse said in a statement.

"We have reshaped Credit Suisse in less than three years," the statement said.

For the first three months of 2018, the bank announced a year-on-year jump in profits of 16 percent to 694 million Swiss francs ($706 million, €579 million).

"Quarterly costs (were) reduced to (their) lowest level" in five years, the statement said.

Eighty percent of the bank's core profitability is now generated by its wealth management and investment banking activities -- up 41 percent from 2015, it added.

"We had planned 2018 to be a year of acceleration in our performance," Thiam said in the statement.

"With these first quarter results, we got off to a good start in our third and final year of restructuring, and we are looking ahead to the future with confidence in our new business model and in our execution capabilities," he added.

Investors welcomed the earnings report, as Credit Suisse's shares jumped 4.5 percent in early Wednesday trading on the Zurich stock exchange.

The bank's wealth management activities achieved their highest quarterly results in seven years, at 14.4 billion Swiss francs, up 20 percent from last year, it said.

The wealth management unit for the Asia Pacific region did particularly well, seeings its revenues rise 12 percent to 991 million Swiss francs.

For the future, Credit Suisse struck a positive note.

"The global economy continues to show encouraging growth prospects across Asia, the US and Europe," it said, adding that it expected its wealth management activities to continue growing.

Nonetheless, it said its client activity levels remained "sensitive" to geopolitical tensions and threats of a US-China trade war.

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