Credit Suisse exceeds expectations with Q2 profit

Keystone

Credit Suisse continues to emerge as one of Europe's strongest banks with a second-quarter profit of SFr1.57 billion ($1.47 billion) that beat analysts' expectations.

The results announced on Thursday follow a first-quarter windfall of SFr2 billion, placing the bank’s profits for the first half of 2009 at SFr3.57 billion. Credit Suisse had posted a record loss of SFr8.2 billion in 2008.

“Our strong second-quarter performance demonstrates that our client-focused, capital-efficient strategy is working very well and that our reduced-risk business model is providing the basis for more sustainable, high-quality, lower volatility earnings,” said Brady Dougan, the bank’s chief executive.

“We expected the global economic environment to remain challenging and uneven business conditions to persist,” he continued. “However, if markets continue to improve we expect to see further momentum across our businesses.”

Should markets sour, Dougan added that the bank is “positioned to perform well”.

Credit Suisse’s private banking division netted new assets worth SFr10.7 billion this quarter. Its investment banking business posted a pre-tax income of SFr1.7 billion, while risky assets fell by ten per cent to $139 billion compared to the first quarter of 2009. The bank wrote down SFr307 million in commercial, mortgage-backed securities.

Asset management divisions also returned to profitability with pre-tax income posted at SFr55 million. Client assets rose 4.8 per cent to SFr1.18 billion compared to the first quarter of 2009.

A Reuters poll had forecast Credit Suisse’s second-quarter earnings to be SFr1.44 billion. The actual result was up 29 per cent over the same period last year.

Credit Suisse stocks closed on Wednesday ahead of the news down 1.81 per cent at SFr48.96 a share on the Swiss exchange. By 10am on Thursday shares were up five per cent at SFr51.45.

swissinfo.ch with agencies

Credit Suisse Q1 results

Credit Suisse’s performance has improved since the bank recorded a SFr8.2 billion loss for the full year of 2008.

The first three months of this year have brought in a better-than-expected net profit of SFr2 billion.

This is also a significant improvement on the SFr2.1 billion loss in the first quarter of 2008.

Its investment banking division led the way, returning to profitability with a pre-tax income of SFr2.4 billion.

Wealthy clients continued to invest their money at Credit Suisse’s private banking unit that saw net inflows of SFr11.4 billion in the first three months of this year.

However, the bank still has risky assets on its books and was forced to write-down SFr1.4 billion of commercial mortgage-backed securities.