Credit Suisse Group AG brushed off the gloom in European bank earnings as wealthy clients added new money and revenue from securities trading rose in a quarter in which peers posted declines.
The results confirmed resilience in the bank’s key businesses following chief executive officer Tidjane Thiam’s three-year turnaround. Healthy inflows of 9.5 billion Swiss francs (US$9.6 billion) into wealth management contrast with outflows at rival UBS Group AG.
In the trading units, fixed income revenue gained 6 percent, more than offsetting a 1 percent drop in equities.
Six months after emerging from Thiam’s painful turnaround, an industrywide slump in trading and the prospect of lower interest rates for longer are testing Credit Suisse’s new business model.
Thiam has pivoted the bank away from volatile investment banking and more toward wealth management, particularly in Asia, where most of the world’s millionaires are created.
“It’s been a good quarter for us,” Thiam said in an interview. The environment “is very difficult, every quarter has been really mixed.”
Thiam has held off on drastic job cuts announced this year by competitors including Deutsche Bank AG and Societe Generale SA.
Credit Suisse said it saw “healthy levels of client engagement” so far this quarter, contrasting with warnings from peers that clients were staying on the sidelines and lower rates would hurt income from lending.
Thiam had earlier forecast that he was “cautiously optimistic” on the three-months through June.
“Negative interest rates are a challenge,” Thiam said in the interview with Bloomberg TV’s Francine Lacqua.
Credit Suisse would announce some measures this month to change pricing and protect income from lending, he said.
Net income at Credit Suisse rose 45 percent to SF937 million, beating the analyst consensus of SF788 million in a survey conducted by the bank.
Credit Suisse said it has bought back SF570 million from a total of a planned SF1 billion of shares this year.
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