Advertisement

Credit Suisse bounces back into profit

Swiss bank Credit Suisse said the second quarter net profit of 170 million Swiss francs still represented an 84 percent drop from the same period last year

Credit Suisse bounced back into profit in the second quarter, earning 170 million Swiss francs ($172 million, 156 million euros), as it reported making progress on a major restructuring programme. Plunging client activity and difficult market conditions as well as writeoffs pushed Switzerland's second largest bank into a net loss of 302 million Swiss francs in the first quarter. However the second-quarter net profit still represented an 84-percent drop from the same period last year as Credit Suisse shifts to focus on private banking and wealth management. The bank pointed to progress in cutting costs, which were down 6 percent from the second quarter last year, while it improved its core capital buffer to 11.8 percent. "We were able to improve our performance in the second quarter and to operate profitably in a volatile context," said chief executive Tidjane Thiam. He said markets were particularly challenging in June "in connection with the UK referendum on EU membership" but that their planning allowed for Credit Suisse to handle significantly increased trading volumes for its clients. "We remain cautious in our outlook for the second half of 2016 in view of the uncertainty created by significant geopolitical and macro-economic concerns, reinforced a few weeks ago by the outcome of the UK referendum," added Thiam. Investors initially appeared to cheer the results, with shares in the banking giant rising after opening but they later slid into the red and were just over 3 percent lower in early afternoon trades. "One of Thiam’s priorities is to make the bank run more efficiently, and this is the first time we witness that his strategy is finally bearing fruit," market analyst Andreas Ruhlmann, of IG Bank, said in an investors' note. He said that, like other investment banks, Credit Suisse had benefited from higher trading volume on the days following the Brexit vote. "This is a one-time event, and we would prefer to see rising profits in the Wealth Management business," he added however.