Credit Suisse misses analyst expectations with a 38% fall in net profit

LONDON Credit Suisseon Thursday posted a 38% slide in internet revenue for the third quarter, however mentioned it anticipated risky market situations to bolster its wealth administration and funding banking divisions wanting forward.

Internet revenue attributable to shareholders got here in at 546 million Swiss francs ($600 million) for the three months to the tip of September, beneath the 679 million Swiss francs that analysts had anticipated, based on Reuters Eikon.

It marks a 38% slide from internet revenue within the third quarter of final yr, though the financial institution’s outcomes throughout that interval had been bolstered by the sale of its InvestLab fund platform to the Allfunds Group.

Within the second three months of 2020, internet revenue was 1.16 billion Swiss francs.

Talking to CNBC on Thursday, Thomas Gottstein, CEO of Credit score Suisse, mentioned it was a “first rate quarter.”

Different highlights for the quarter:

  • Internet income dropped 2% to five.2 billion Swiss francs from 5.three billion Swiss francs a yr in the past;
  • CET 1 ratio (a measure of financial institution solvency) reached 13% from 12.4% a yr in the past.

Efficiency in Credit score Suisse’s wealth administration division disenchanted, with robust transaction-based revenues being greater than offset by decrease charges and internet curiosity revenue. Income on the closely-watched division fell 10% year-on-year.

The financial institution’s funding banking division fared higher, nonetheless, with internet revenues rising by 11% within the third quarter from a yr in the past, on “constructive” market situations and better shopper exercise, primarily in Asia.

“Revenues in Asia, they’re now 20% of our general revenues globally, which is among the highest of our friends it is vitally clear that Asia is way stronger than the remainder of the world proper now,” Gottstein informed CNBC’s Geoff Cutmore.

Mounted revenue gross sales and buying and selling revenues grew by 10% year-on-year, whereas fairness gross sales and buying and selling revenues elevated by 5%.

Going ahead, the Swiss bank mentioned it might help its clients “via the persisting COVID-19 pandemic and the resultant financial challenges.”

“We’d anticipate this atmosphere to proceed to end in elevated ranges of transactional and buying and selling exercise, throughout each our wealth administration and funding banking companies, as our shoppers reply to the macroeconomic uncertainties,” the financial institution mentioned in a press release.

Credit score Suisse added that it was planning to pay out the second tranche of its 2019 dividend and resume its share buyback program in January, with the goal of repurchasing between 1 and 1.5 billion Swiss francs of shares for the total yr.

Shares of Credit score Suisse are down by about 30% for the reason that begin of the yr.

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