Swiss banking giant Credit Suisse yesterday reported a first-quarter net profit of 2 billion Swiss francs (US$1.72 billion), or SF1.60 per share, following a turnaround in its previously ailing investment bank.
The figure was better than analysts’ expectations for a net profit of about SF726 million and compared with a net loss of SF2.15 billion in the same quarter last year.
Chief executive Brady Dougan said the results “show the benefit of the measures we took last year across the bank, including cost reductions and the further strengthening of our capital position.”
Credit Suisse embarked on a major cost cutting drive last year, slashing 11 percent of its workforce in an attempt to reverse a series of quarterly losses that amounted to SF8.2 billion last year — the worst loss in the bank’s 153-year history.
Many of the 5,300 job cuts fell in its investment banking business, which had caused billions in write-downs for the whole group. Pretax income for the investment bank reached SF2.4 billion in the first quarter, Credit Suisse said.
Net write-downs from investments in mortgage-related securities amounted to SF1.4 billion, it said. This compares with SF6 billion in the same quarter last year.
Credit Suisse said pretax profits in its private banking business reached SF1 billion, while asset management recorded a pretax loss of SF490 million.
The Zurich-based bank also said it saw net new assets inflows of SF11.4 billion during the quarter. The figure is an important indicator of future business in banking.
The results beat those of cross-town rival UBS, which has warned investors that it expects a SF2 billion loss in first quarter.
Switzerland’s biggest bank has been hard hit by the financial crisis and last year took up a government offer to buy out its toxic assets. By contrast, Credit Suisse has so far escaped state intervention.