Credit Suisse reports unexpected Q3 profits after restructuring

Bank’s new CEO has cut thousands of jobs and switched focus to wealthy clients

Net income at Credit Suisse fell to 41 million Swiss francs (€38 million) from 779 million francs a year earlier. Photograph: Reuters

Net income at Credit Suisse fell to 41 million Swiss francs (€38 million) from 779 million francs a year earlier. Photograph: Reuters

 

Credit Suisse posted a surprise profit in the third quarter, with all main units contributing, as chief executive Tidjane Thiam continued to cut costs and eliminate jobs.

Net income fell to 41 million Swiss francs (€38 million) from 779 million francs a year earlier, the Zurich-based bank said in a statement on Thursday.

Analysts had forecast a loss of 150 million francs, according to the median of seven estimates in a Bloomberg survey.

Restructuring costs were 145 million francs in the quarter. Europe’s largest lenders are under pressure to deepen cost cuts, hurt by record-low interest rates, mounting legal charges and tougher regulatory scrutiny.

Since taking over at Credit Suisse last year, Mr Thiam (54) has eliminated thousands of jobs, slashed risk-weighted assets, cut back the securities business and pledged to focus on managing money for the wealthy.

Market value

The bank has lost about 39 per cent of its market value this year, while Deutsche Bank, which is also restructuring its businesses, has dropped 45 per cent.

While the shares have pared some losses since July, when they reached a record low of 9.76 francs, they’re still down 48 per cent since Thiam replaced Brady Dougan in July, 2015.

The chief executive accelerated the pace of his overhaul in March, announcing plans to eliminate some 6,000 jobs across the bank this year, after the lender was forced to write off about $1 billion on risky securities over six months.

On Friday UBS, Switzerland’s largest bank, reported an 11 per cent gain in pre-tax profit to 877 million francs, beating analyst estimates, with chief executive Sergio Ermotti pledging to continue cost cuts.

– (Bloomberg)