Bloomberg

(Bloomberg) -- Credit Suisse Group AG recorded a second consecutive loss after a tumultuous start to the year led to further writedowns on trading positions and prompted deeper cuts in its investment bank.

Switzerland’s second-biggest bank on Tuesday reported a net loss of 302 million Swiss francs ($311 million) in the three months through March, compared with a profit of 1.05 billion francs a year ago. Analysts predicted a bigger loss of 344 million francs, the average of 10 estimates compiled by Bloomberg.

Credit Suisse is downsizing its investment bank to free up capital for developing its wealth management business, particularly in emerging markets like the Asia-Pacific region. Chief Executive Officer Tidjane Thiam accelerated the overhaul in March, disclosing more markdowns on high-risk securities already blamed for a bigger-than-expected loss in the fourth quarter.

“The market was largely shut down in January and February owing to concerns over global growth, oil and expanding markets implementing negative rates,” analysts at Macquarie led by Piers Brown, who has an outperform on Credit Suisse, said in a note to clients before Tuesday’s results.

Credit Suisse is seeking relief from post-crisis regulations requiring more capital to backstop riskier activities. Deutsche Bank AG and Barclays Plc, both also in the midst of restructuring, are likewise scaling back some trading activities, while UBS Group AG pivoted to wealth management more than three years ago.

The trading losses compounded doubts about Thiam’s strategy, with the bank among lenders hardest hit by an industry-wide selloff. Credit Suisse has lost 38 percent of its value this year, the most in a group of 10 global peers tracked by Bloomberg Intelligence. Deutsche Bank has dropped 35 percent, while UBS has lost 22 percent.

To contact the reporter on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net. To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net, Cindy Roberts

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