Credit Suisse Starts Last Year of Revamp With Rise in Profit -- 2nd Update
April 25 2018 - 7:24AM
Dow Jones News
By Pietro Lombardi
Credit Suisse Group AG on Wednesday posted a strong rise in
first-quarter net profit, beating expectations and bolstering
evidence that the Swiss lender's yearslong restructuring has put it
back on track to growth.
Net profit grew 16% to 694 million Swiss francs ($709.1 million)
as revenue rose 1.8% to 5.64 billion francs. Analysts had expected
Credit Suisse to report net profit of 653 million francs on revenue
of 5.49 billion francs.
Credit Suisse shares were up 5.3% in morning trading.
The results kick off a crucial year for the Swiss bank, which
reported its third-consecutive annual loss in 2017 after a charge
related to U.S. tax reform hit its fourth-quarter results. The
lender is in the last of a three-year overhaul, shifting its
emphasis toward wealth management from investment banking.
"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 in the results announcement. In a conference call, he
said he expected the bank to accelerate its performance in
2018.
The bank said it is confident of the potential of its
wealth-management operations, as well as its investment-banking and
capital-markets division. The bank expects lower costs and higher
returns to allow it to increase payouts to shareholders over time,
Mr. Thiam said.
But Credit Suisse warned that markets would be exposed to
periods of heightened volatility due to global trade negotiations,
monetary policy tightening and other geopolitical events.
"Client activity levels remain sensitive to these factors,
specifically within our more market dependent activities," Credit
Suisse said.
Morgan Stanley said the results were good, with wealth
management making an especially strong showing.
In the quarter, Credit Suisse's 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. The investment-banking and
capital-markets division 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 07:09 ET (11:09 GMT)
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