Credit Suisse Starts Last Year of Revamp With Rise in Profit -- Update
April 25 2018 - 3:21AM
Dow Jones News
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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