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Credit Suisse net income grew by 45% in the second quarter, strong performance in wealth management and three months for traders to offset the decline in traditional investment banking activities.
The bank said Wednesday that its net profit for the period was 937 million Swiss francs. The group's turnover of 5.5 billion francs was stable compared to the previous year, but the absence of restructuring costs helped to increase earnings.
Credit Suisse went back to black for the first time in four years in 2018 after a three-year restructuring that had resulted in the removal of thousands of jobs in sales and trading in London and New York, as well as the refocusing on wealth management. Its international wealth management business recorded an increase in pre-tax profit of 2.5% to CHF 444 million in the second quarter.
Credit Suisse Managing Director Tidjane Thiam said: "These results, obtained in a difficult environment, indicate that our bank has emerged from three years of restructuring with a solid franchise and an efficient platform, which allows us to support our clients. and generate increasing returns. for our shareholders, with a capital of 1.3 billion CHF given to investors since the beginning of the year. "
The results should ease the pressure on Thiam to further reduce the sales and trading division of Credit Suisse, which outperformed its rivals in the quarter by increasing its income on both fixed income and equity. This resulted in a 141% increase in pre-tax profits of the bank's global market unit to CHF 357 million.
Credit Suisse noted that the sale of a stake in the Tradeweb bond trading platform in April had not helped improve its trading performance.
The investment banks' trading desks have had a difficult 2019 year, and many – including Citigroup, Deutsche Bank and HSBC – have been forced to downsize in expensive divisions.
In June, Thiam told attendees at a Goldman Sachs European Financials conference in Paris that he had resisted pressure to further downsize his investment bank by the end of 2018, as revenues from Negotiations were falling.
Analysts continue to believe that Credit Suisse is even harder to reduce when it wants to fully revitalize its investment bank by focusing more on M & A advisory and underwriting.
However, Credit Suisse's more traditional banking business experienced difficulties in the second quarter. The pre-tax profits of its investment banking and capital markets division dropped 6% to CHF 6 million, compared to a 40% drop in advisory fees and a 22% decline in revenues from the markets. borrowed capital, erasing small gains in equity markets.
In a statement, the bank attributed the drop to "a drop in customer activity, investor concerns about global trade negotiations and slowing GDP growth."
Thiam added to the results call: "We had a greater proportion of canceled trades than other players, that's all that happened. These movements can happen. We do not read in this issue … and see nothing broken here … this franchise is absolutely vital. "
To contact the author of this story with comments or news, write to Nell Mackenzie.
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