Swiss bank Credit Suisse Group today reported a 29 percent increase in second quarter net profit after a strong performance in its investment unit drove up core revenues.
Swiss bank Credit Suisse Group on today reported a 29 percent increase in second quarter net profit after a strong performance in its investment unit drove up core revenues.
The net profit of 1.57 billion Swiss francs ($1.41 billion) compared with 1.22 billion francs in the same quarter last year and matched most analysts' expectations.
Shares rose 3.5 percent to 50.65 francs ($47.49) in morning trade on the Zurich exchange.
Credit Suisse noted that the results included one-time charges, legal costs and tax benefits, without which net profit in the second quarter would have been 2.5 billion francs. Credit Suisse settled a dispute last month with Huntsman Corp. over claims the bank scuttled a $6.5 billion buyout of the U.S.-based chemicals maker.
"Our reduced-risk business model is providing the basis for more sustainable, high-quality, lower volatility earnings," Chief Executive Brady W. Dougan said in a statement.
Investment banking, which was blamed for much of the record loss Credit Suisse suffered last year, contributed the lion's share in profits, about 1.66 billion francs before tax.
Profit in private banking dropped 23 percent to 935 million. Wealth Management saw a similar decline to 662 million francs before tax. Corporate and retail banking saw earnings fell 30 percent to 273 million before tax.
Overall, revenues rose 10 percent to 8.6 billion from 7.7 billion. Costs also rose by 10 percent, partly due to the 5,300 job cuts the bank announced last December. Credit Suisse currently has 46,700 employees, down from 49,000 last year.
Assets under management dropped 11 percent to 1.175 trillion francs compared with 1.321 trillion in the same quarter last year.
Analysts at Zuercher Kantonalbank noted, however, that the group's increased Tier 1 capital ratio of 15.5 percent is far better than industry average.
Looking ahead, Credit Suisse said it expects the global economic environment to remain challenging, but expressed confidence that it would perform well whether conditions improve or worsen.
The results are the second consecutive profit for what is now Switzerland's largest bank by market capitalization. Having posted its worst loss in 153 years in 2008, Credit Suisse returned a net profit of 2 billion Swiss francs in the first quarter.
The Zurich bank also once again trounced cross-town rival UBS AG, which warned last month that it expects to post a loss in the second quarter.
Credit Suisse, which remains one of the few global banks to have avoided government bailouts in the financial crisis, has also so far escaped the scrutiny of U.S. justice officials, who are involved in a major tax evasion case against UBS. The bank is accused of helping American clients avoid billions in U.S. taxes by hiding money in secret offshore accounts.
Investigators have repeatedly hinted that they will expand their probe to include other major foreign banks.
CEO Dougan expressed confidence that Credit Suisse's cross-border business is "positioned well for success."
"We have continued to prepare our wealth management business for the new environment by expanding our international footprint and building an efficient, global platform that complies with applicable laws and regulations," he said.
