Switzerland’s second-largest bank retains cautious outlook

Switzerland's second-biggest bank swings to a surprise profit Keystone

Amid a surprise upturn in profit, Credit Suisse’s chief executive officer signalled that the bank will not let down its guard while marking progress on its turnaround strategy.

“For us, the second quarter was a quarter of progress,” CEO Tidjane Thiam told journalists in a 45-minute webcast news conference on Thursday. “We see some evidence here that our strategy is gaining traction.”

After two profit-losing quarters, the Zurich-based bank’s results for the April-June quarter were helped by a 7% decline in costs from a year ago, Thiam said. The results also were boosted by a 64% reduction in restructuring expenses from the first quarter.

Credit Suisse said its net profit for the second quarter was CHF170 million ($172.5 million), down sharply with CHF1.05 billion in the same period of 2015. But analysts had been expecting a loss.

Brexit … and beyond

Thiam, who took over the bank a year ago, has been trying to scale back investment banking to allow more capital to be used for wealth management.

“We can never say the worst is over, for a forward looking statement, but I would go back to the fundamentals of the strategy we are driving,” he told reporters. “We said that we must reduce costs to increase the resilience of the company. … So you’ve seen for the first time absolute costs go down.”

Thiam emphasised the bank has greatly reduced risks in recent months, and that it already began transferring some of its London assets to other locations in Europe and Asia even before the vote by the United Kingdom to leave the European Union.

Brexit has had “no impact” yet, but Credit Suisse is ready to adapt if needed, he added.