Credit Suisse Profit More Than Doubles as Trading Improves
Oct. 23 (Bloomberg) — Credit Suisse Group AG, Switzerland’s second-biggest bank, said third-quarter profit more than doubled after clients traded more than the previous year.
Net income rose to 1.03 billion Swiss francs ($1.08 billion), the Zurich-based bank said today in a statement. That compares with 454 million francs a year ago and beat the 809 million-franc average estimate of five analysts surveyed by Bloomberg.
Chief Executive Officer Brady Dougan last week promoted two investment bankers in a revamp that boost the influence of the securities unit within the executive board. Trading activity has benefited from price swings stemming from a stronger U.S. dollar and a slowdown in the European economy.
The third quarter “was characterized by a notable pick-up in volatility and volumes in September,” Citigroup Inc. analysts Kinner Lakhani and Nicholas Herman wrote in a note earlier this week. Trading in debt, currencies and commodities has overcome “two-thirds of structural challenges,” they said.
Shares in Credit Suisse dropped 8.1 percent this year and stood at 25.05 francs yesterday, valuing the bank at 40.3 billion francs. This compares with a decline of 1.4 percent in the 49-member STOXX 600 Banks Index.
Amine, O’Hara
The five biggest U.S. securities firms saw their combined revenue from trading fixed income, currencies and commodities rise 14 percent in the third quarter from a year earlier, data compiled by Bloomberg Intelligence show.
Credit Suisse on Oct. 17 named Jim Amine and Tim O’Hara co- heads of the investment banking division, joining Gael de Boissard in that role. Eric Varvel, who helped oversee the unit for five years, stepped down from the executive board and assumed the role of chairman for the Asia-Pacific and Middle East regions.
Credit Suisse still relies more on its investment bank than local competitor UBS AG. While UBS has shrunk its securities unit to focus on managing money for the wealthy, Credit Suisse plans to allocate an equal amount of capital to the investment bank and to the money managing businesses.
Analysts and investors have said Credit Suisse should step up efforts to focus more on wealth management. This could help boost returns and shore up capital, where the bank lags behind its main competitors after paying a fine of $2.6 billion in the second quarter for helping Americans evade taxes.
To contact the reporters on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net; Elena Logutenkova in Zurich at elogutenkova@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Cindy Roberts
