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The big bank outperformed the market expectations for the second quarter with a surprisingly strong rise in profits. But where there is a lot of light, there is also the shadow.
Ermes Gallarotti
Credit Suisse has exceeded expectations. (Photo: Arnd Wiegmann / Reuters)
Credit Suisse triggered post-combustion in the second quarter. With a significant 7% increase in turnover and a 2% cost reduction, the profit doubled compared to the previous year to reach CHF 647 million, bringing the surplus to 1 , 3 for the first half billion francs, which equates to an expansion of nearly half compared to the previous year.
Improving operational resilience results in a significant improvement in operational efficiency – the operating ratio decreases significantly from 87.2% to 79.9%. Thus, the costs "gnaw" a little less than 80 Rp. Of each yield franc, but that is still a lot. The still poor performance of profitability is also demonstrated by the still unimpressive return on equity of 9.1%
Strong universal bank
The Swiss universal bank, which has posted solid results for ten quarters, remains at 553 million euros reported the highest quarterly profit up here. With a cost / income ratio of 58.6%, it not only functions much more efficiently than the bank as a whole, but also resists comparison with the best cantonal and regional banks. The annualized gross margin of 1.45% reflects above-average profitability
The International Wealth Management unit is not less impressive. In the quarter under review, earnings before taxes increased by one-fifth to CHF 433 million, the Group's second largest contributor to earnings. The high return on equity of just under 32% and the low cost / income ratio of 67.4% compared to other badet managers stand out. In total, net inflows of CHF 13.2 billion were received, most of which (CHF 8 billion) was entrusted to the badet management division, ie institutional activity.
Flaues Handelsgeschäft
but the Asia-Pacific unit, which is heavily involved in badet management and investment banking, has not outperformed. Profit before tax increased significantly to CHF 217 million, attracting a net inflow of CHF 3.4 billion, slightly lower than the previous year, attracting just under 15% of capital employed and slightly improving its efficiency. operational. The weaker equity markets in Asia and more cautious customers reduce their credit risk.
The quarterly results of the world's leading investment banking division, Global Markets, are unlikely to fit into the overall picture. Its pre-tax profit has plummeted by more than 40% to reach a measly 148 million francs, with slightly lower incomes and higher costs. While the income in the stock trading, namely in derivatives, increased, the bond business lost a considerable momentum, all the more so as the activity in the stock market, emission has decreased. Return on equity capital fell to 4.2%, while operational efficiency remained modest. The clbadic consulting business, much smaller (Investment Banking & Capital Markets) has held up better. Profit contribution of CHF 110 million is two-fifths higher than in the previous year
Gradually upward
There is a decline in terms of capitalization. The "hard" equity ratio (CET1) fell from 14.2% to 12.8% (12.5% benchmark), which is likely related to the significant increase in risk-weighted badets. risk function. On the other hand, the unweighted CET1 ratio (leverage ratio) increased slightly from 3.8 to 3.9%.
CEO of Tidjane Thiam Group was satisfied with the press release: "In the second quarter of 2018, we performed very well. We achieved our highest pre-tax adjusted earnings in the last twelve quarters and increased our earnings year-over-year for the seventh consecutive quarter.
The outlook for global economic growth for the second half of 2018 is positive. However, it counts with considerable uncertainty given the increasing tensions in world trade and the impact of changes in central bank monetary policy. In the long run, this could have a negative impact on investor confidence, according to the statement.
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