By Pietro Lombardi 
 

Credit Suisse Group AG (CSGN.EB) said Wednesday that first quarter net profit increased by double digits, beating analysts' expectations as it enters the last year of its restructuring plan.

Net profit grew roughly 16% in the period to 694 million Swiss francs ($709.1 million) on revenue that rose to CHF5.64 billion from CHF5.53 billion, it said. Analysts had expected Credit Suisse to report net profit of CHF653 million on revenue of CHF5.49 billion, according to a forecast based on estimates from 19 analysts provided by the company.

"With these first-quarter results, we got off to a good start in our third and final year of restructuring," Chief Executive Tidjane Thiam said.

The results kick off a crucial year for the Swiss banking giant, which reported its third-consecutive annual loss in 2017 after a charge related to U.S. tax reform hit fourth-quarter results. The bank is in the last year of a three-year overhaul, in which it put greater emphasis on wealth management while streamlining its investment-banking unit.

In a conference call, Mr. Thiam said 2018 should be a year of "acceleration in performance," following stabilization and consolidation in 2017 and strategic changes in 2016.

Global economic growth is encouraging, Credit Suisse said, and it is confident of the potential of its wealth-management operations and investment-banking and capital-markets division, or IBCM. The bank expects lower costs and an increased return on capital to allow it to return more capital to shareholders over time, Mr. Thiam said.

But Credit Suisse warned that markets and a range of asset classes would be exposed to periods of heightened volatility due to geopolitical events, the news flow surrounding trade negotiations and the outcome of monetary policy tightening.

"Client activity levels remain sensitive to these factors, specifically within our more market dependent activities," Credit Suisse said.

On the whole, Morgan Stanley said the results were good, with wealth management making an especially strong showing.

In the quarter, Credit Suisse's international wealth-management division reported a 45% increase in adjusted pretax income. The Swiss universal bank and Asia Pacific operations reported a double-digit increase in adjusted pretax income. IBCM reported lower net revenue "in a quarter characterized by muted client activity," the bank said.

 

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

 

(END) Dow Jones Newswires

April 25, 2018 03:06 ET (07:06 GMT)

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