Credit Suisse

Credit Suisse

23 July 2015

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Credit Suisse surprises market with higher profit than expected - IB below expectations

Higher profit than expected, driven by strong net interest income – Investment Banking below expectations on higher costs - capital ratios improve but remain clearly below peer average. The adjusted pre-tax profit was above expectations, driven by revenues. The Corporate Center was much better due to higher fair value gains. Credit Suisse reported Q2/15 earnings of CHF 1,05 billion compared to a loss of 700 million francs in the respective period las year. According to Reuters, analysts expected a profit of 783 million francs.

Higher pre-tax profit in the Wealth Management Segment than expected due to very strong net interest income, leading to an increase of gross and net margins. Net new money was higher than expected on strong flows from APAC (Greater China). Despite slightly higher revenues than expected, pre-tax profit in the Investment Banking Segment was lower due to high costs (regulatory-driven salary increases, UK bank levy, other regulatory costs). Fixed income was below expectations due to lower credit and emerging markets. Equities was better than expected due to APAC. Advisory & underwriting fees had a good recovery after a very weak 1Q15.

Credit Suisse reported a good quarterly result, mainly driven by much higher net interest income than expected. The Investment Banking disappointed on higher costs. Capital ratios improved but remain well below the average of the peer group. The outlook seems rather cautious but this might reflect the management change. In the letter to shareholders, Tidjane Thiam highlights the importance of Asia.

 

 

07/12/2022 10:40:59