ZURICH: Swiss bank Credit Suisse's third-quarter (3Q) net profit tumbled 74% to miss forecasts, as sluggish equities trading halved investment banking earnings from the previous quarter, according to Reuters on Thursday, Oct 21.
Switzerland's No 2 bank by market value behind UBS said net profit fell to 609 million Swiss francs (RM1.97 billion), below a forecast for CHF980 million in a Reuters poll.
Investment banking pre-tax income halved to CHF395 million from an already subdued CHF784 million the previous quarter, as chief executive Brady Dougan's bold strategy to hire investment bankers aggressively in the second quarter failed to pay off immediately with markets flattening.
CS was the first big European bank to report third-quarter numbers after US rivals such as Goldman Sachs posted higher than expected profit this week despite low trading volumes in the US equity market, though Morgan Stanley, which has derisked its trading operations since the credit crisis, surprised with a disappointing loss.
Shares in Credit Suisse were seen trading 2.8% lower at the open, premarket data provided by bank Clariden Leu showed. They have fallen around 15% this year, against a 3% dip in the Stoxx 600 European banks index and a 10% rise in the stock of local rival UBS, playing catch-up to CS's strong rally in 2009.
Earnings at CS's bedrock private bank outstripped the normally more lucrative investment banking segment for a second quarter running.
"We believe the prospects for growth remain very attractive and our private bank is poised to capitalise as markets improve," Dougan said.
The private banking segment attracted CHF12.6 billion in net new client assets, against CHF13.1 billion a year earlier.
Turgid equity markets ate into investment banking earnings, though the fixed income, underwriting and advisory operations performed well, Dougan said.
The two big Swiss banks have cut back on proprietary trading as local regulators urge a stronger focus on traditional wealth management than riskier investment banking, making earnings less volatile but less spectacular than many US counterparts.
CS maintained a strong Tier 1 capital ratio of 16.7% ' one of the highest in the industry ' versus 16.3% at the end of the first half and was on track to meet new international and local capital requirements aimed at reducing bank risk-taking.
"We are well placed to meet these new requirements and at the same time compete and deliver attractive returns to our shareholders," Dougan said. ' Reuters
Switzerland's No 2 bank by market value behind UBS said net profit fell to 609 million Swiss francs (RM1.97 billion), below a forecast for CHF980 million in a Reuters poll.
Investment banking pre-tax income halved to CHF395 million from an already subdued CHF784 million the previous quarter, as chief executive Brady Dougan's bold strategy to hire investment bankers aggressively in the second quarter failed to pay off immediately with markets flattening.
CS was the first big European bank to report third-quarter numbers after US rivals such as Goldman Sachs posted higher than expected profit this week despite low trading volumes in the US equity market, though Morgan Stanley, which has derisked its trading operations since the credit crisis, surprised with a disappointing loss.
Shares in Credit Suisse were seen trading 2.8% lower at the open, premarket data provided by bank Clariden Leu showed. They have fallen around 15% this year, against a 3% dip in the Stoxx 600 European banks index and a 10% rise in the stock of local rival UBS, playing catch-up to CS's strong rally in 2009.
Earnings at CS's bedrock private bank outstripped the normally more lucrative investment banking segment for a second quarter running.
"We believe the prospects for growth remain very attractive and our private bank is poised to capitalise as markets improve," Dougan said.
The private banking segment attracted CHF12.6 billion in net new client assets, against CHF13.1 billion a year earlier.
Turgid equity markets ate into investment banking earnings, though the fixed income, underwriting and advisory operations performed well, Dougan said.
The two big Swiss banks have cut back on proprietary trading as local regulators urge a stronger focus on traditional wealth management than riskier investment banking, making earnings less volatile but less spectacular than many US counterparts.
CS maintained a strong Tier 1 capital ratio of 16.7% ' one of the highest in the industry ' versus 16.3% at the end of the first half and was on track to meet new international and local capital requirements aimed at reducing bank risk-taking.
"We are well placed to meet these new requirements and at the same time compete and deliver attractive returns to our shareholders," Dougan said. ' Reuters
No comments:
Post a Comment