Credit Suisse, Switzerland’s second largest bank, has posted around a CHF3 billion ($3.3 billion) net income for 2013, more than double what it made the previous year. But its fourth quarter results were disappointing.This content was published on February 6, 2014 - 09:24
It missed expectations with a small increase in fourth-quarter net profit after increased legal costs arising from United States probes into alleged tax evasion and the sale of mortgage-backed bonds.
For the fourth quarter, net profit stood at CHF267 million, a little up from CHF263 million a year ago, when the bank said efforts to overhaul its business were beginning to bear fruit.
But for 2013 overall, Credit Suisse posted CHF3.07 billion net income attributable to shareholders, compared with CHF1.35 billion for 2012, it said in a statement on Thursday.
Credit Suisse has taken a CHF39 million provision over mortgage litigation at its investment bank, as well as CHF175 million for a US investigation into hidden offshore accounts in Switzerland.
The institution is one of 14 Swiss banks being targeted by US prosecutors for allegedly helping wealthy Americans dodge taxes with hidden offshore accounts, for which it set aside CHF295 million three years ago.
Chief Executive Brady Dougan said the bank's results so far this year have been largely consistent with good starts seen in previous years, with some differences depending on businesses.
Like most investment banks, Credit Suisse is scaling back on riskier fixed income activities that absorb large amounts of capital, which are under fire from regulators following the 2008-09 financial crisis.
“We are confident that the continued momentum we see in our strategic businesses, combined with the successful execution of the run-off of positions and losses in the non-strategic units, will allow us to achieve our targeted return on equity of 15% over the cycle,” Dougan commented in the statement.
Credit Suisse’s results come just days after Switzerland`s largest bank, UBS, posted forecast-beating net profits of CHF3.17 billion for 2013. Industry experts said it was well set to continue its good run.
UBS still faces its own legal issues from various regulators, but has previously settled its dispute with the US authorities over tax evasion. At the end of 2012, UBS also settled Libor rigging probes for $1.5 billion.
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