Credit Suisse CFO Mathers Says Investment Bank Sales Rose
Sept. 9 (Bloomberg) — Credit Suisse Group AG earned more revenue from its investment bank in July and August than in the same months last year, Chief Financial Officer David Mathers said.
Revenue was up “in the Swiss franc and U.S. terms, albeit with a more pronounced seasonal volatility,” Mathers, 49, told an industry conference in New York. He didn’t say how much revenues rose, only that the “pipeline of transactions remains strong.”
He was somewhat more optimistic about the third quarter than his fellow CFO at Citigroup Inc., John Gerspach, who said that fixed-income and equity trading revenue at the New York- based bank will be “roughly in line” with the same period a year ago.
Results probably will be helped by an increase in revenue this month compared with August, Gerspach, 61, said yesterday at the same conference.
Credit Suisse estimated in a report last week that revenue from fixed income for the industry as a whole is likely to be as much as 5 percent greater than a year earlier.
Mathers, 49, said the bank’s private banking and wealth management business saw trading conditions similar to the second quarter. Lower net interest income and weak transaction activity contributed to a lower gross margin, he said, referring to revenue produced by a unit relative to the assets it oversees.
Litigation stemming from the sale of mortgage-backed securities blamed in the financial crisis continue to weigh on the bank, he said.
“Residential mortgage litigation remains a drag on earnings, particularly in the investment bank,” Mathers said in response to questions after his prepared remarks.
Credit Suisse paid $885 million to settle lawsuits by the Federal Housing Finance Agency over mortgages sold to Fannie Mae and Freddie Mac in March. The company said at the time the agreement resolved the largest mortgage-related investor litigation.
Mathers also touched on the status of investigations around the world into allegations of manipulating global interest rate and currency benchmarks.
The Swiss bank does not have any “particular exposure” to investigations into the manipulation of the Libor interest rate benchmark, he said.
Investigations into the rigging of foreign exchange benchmarks are “ongoing for us and the industry,” Mathers added. “The investigation has so far not revealed anything material around Credit Suisse.”
Fines related to foreign exchange remain the largest unknown in future litigation costs for global banks, HSBC Holdings Plc said in a note yesterday.
To contact the reporter on this story: Jeffrey Vögeli in Zurich at jvogeli@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Cindy Roberts
