Financial Results

Pre-Tax Income Rises At Credit Suisse's Wealth Businesses In Q1

Tom Burroughes, Group Editor, 10 May 2016

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Switzerland's second-largest bank issued first quarter figures today, which it says show its restructuring is starting to bear fruit in areas such as wealth management.

Credit Suisse's wealth management operations pulled in net new money and logged a rise in pre-tax income, on an adjusted basis, in the first three months of this year, showing that moves to reposition operations are starting to gain ground, it said today.

The whole of the Zurich-listed banking group today reported a net loss, attributable to shareholders, of SFr302 million ($311 million) in the first three months of 2016, from SFr1.054 million in the same period last year.

When analysed for its "core" results - which focus on the ongoing part of the bank and strip out those parts being run off and disposed in its restructuring - Credit Suisse said total pre-tax income was SFr240 million, against SFr1.894 billion.

Total assets under management were SFr1.18 billion, down from SFr1.214 billion, the bank said in a statement. Net new assets were SFr10.5 billion, against the figure of SFr2.1 billion in the previous quarter and SFr14.9 billion a year ago.

Last year, the bank shook up its business lines, creating its Swiss universal bank (including wealth management in Switzerland); independent wealth management; Asia-Pacific; global markets; investment banking and capital markets, and its corporate resolution centre.

"The overall results for the group reflect challenges in the global economy that created unique pressures for the finance industry – January and February were very challenging months for international financial markets. However, these results also contain clear indications that our strategy is  gaining traction in our chosen markets in Asia-Pacific (APAC), international wealth management (IWM) and Switzerland. We are very encouraged by the strong underlying performance of our wealth management focused divisions," said Urs Rohner, chairman, and Tidjane Thiam, chief executive.

Compared with the fourth quarter of last year, the Swiss universal bank, APAC and IWM divisions grew their adjusted pre-tax income in the first quarter by 39 per cent, 70 per cent and 21 per cent, respectively, the firm said.

In addition, the bank's wealth management-focused divisions delivered approximately SFr1 billion of adjusted pre-tax income.

"In particular, we saw profitable growth and inflows of quality new assets into these divisions during the quarter, with net new assets of SFr4.3 billion, SFr6.9 billion and SFr3.0  billion for APAC, IWM and the Swiss UB, respectively," Rohner and Thiam said.

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