Zurich-based Credit Suisse reported a first-quarter net loss of 302 million Swiss francs ($311 million), compared with a profit of 1.05 billion francs in the same period previous year. According to a poll by Bloomberg, analysts predicted a loss of CHF344 million in that period.
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In March, after reporting larger-than-expected losses in the fourth quarter in its business that trades bonds, the bank announced it would reduce the risk-weighted assets allocated to the investment banking unit and axe 2,000 jobs in its global markets division.
Credit Suisse Group AG reported a second straight pretax loss at the securities business it’s overhauling as Chief Executive Officer Tidjane Thiam offloaded much of the high-risk assets that have triggered more than $700 million in losses since a year ago.
The global markets and investment banking losses were partly offset by rising sales and earnings in wealth management, which, like several lenders, Credit Suisse is making a major focus.
Global markets were roiled at the beginning of the year over fears that the Chinese economy, a key driver of global growth in recent years, would slow sharply. “March and then in April, subdued market conditions and low levels of client activity are likely to persist in the second quarter of 2016 and possibly beyond”, he said in a statement.
It’s been a tough 2016 for Credit Suisse.
The loss for Credit Suisse’s investment bank had been flagged earlier by the lender.
“We’re at the trough – I don’t think we’ll get worse conditions than in the first quarter”, Thiam said.
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It said today that in the first quarter, on an annualised basis, it made more than half of the CHF 1.4bn of net cost savings it was targeting this year. This compares to pre-tax income of 1.51 billion francs and adjusted pre-tax income of 1.36 billion francs in the year-ago period, respectively. The International Wealth Management division, which covers markets outside of Asia and Switzerland, reported 5.4 billion francs in net new assets for its private banking unit in the period, compared with outflows in the same period past year. The International Wealth Management unit reported a 3% rise in pretax profit in the quarter, while net revenue rose 4%.
