Credit Suisse pleased with third quarter performance in 'challenging' environment
Credit Suisse Group
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07:46 20/03/24
Credit Suisse reported a 70% improvement in group pre-tax income in its third quarter results on Wednesday, to CHF 1.1bn (£0.86bn), while group net income rose 108% year-on-year to CHF 881m.
The Swiss investment banking and financial services giant said its group return on tangible equity was 9% in the third quarter, up from 4.5% at the same time last year, which included the gain on the InvestLab transfer, partially offset by accounting volatility from structured notes.
Tangible book value per share totalled CHF 16.24, as the company’s tangible book value increased by CHF 1.2bn in the first nine months of 2019.
The firm reported a record CHF 72bn of net new assets across the group for the first nine months, including CHF 12.8bn of net new assets in the third quarter.
Looking at its performance, Credit Suisse said it was delivering growth in a “challenging” market environment, as its wealth management businesses generated a 12% increase in transaction and performance-based revenues in the third quarter, and saw stable net interest income and recurring commissions and fees compared to the third quarter of 2018.
Asset management revenues were up 12% in the third quarter, marking the 11th consecutive quarter of year-on-year management fee growth.
Global investment banking franchise revenues were ahead 8% on a US dollar basis year-on-year, while global markets revenues were up 34% at $1.43bn, with pre-tax income standing at $272m.
Fixed income sales and trading was up 72%, and equity sales and trading rose 11% year-on-year on a US dollar basis, and global advisory and underwriting revenues were down 18% year-on-year on a dollar basis.
Credit Suisse also reported a “continued strong capital position”, with a Tier 1 leverage ratio of 5.5%, compared to 5.1% in the third quarter of last year.
Its CET1 capital stood at CHF 37.4bn, up by CHF 1.8bn, or 5%, year-on-year, while the company’s CET1 ratio was 12.6%, or 12.4% post-recalibration.
Total capital returned to shareholders in the year-to-date stood at CHF 1.4bn through the share buyback programme, at CHF 695m, and dividends, at CHF 695m.
“During the third quarter of 2019, we continued to implement our strategy of being a leading wealth manager with strong investment banking capabilities,” said chief executive officer Tidjane Thiam.
“We have continued, in a challenging environment, to grow our wealth management franchises, increasing our revenues and gathering record net new assets of CHF 72bn across the group year-to-date.
Our Global Investment Banking revenues, across markets and advisory, underwriting and financing activities, have also grown strongly, up 8% year-on-year.”
Thiam confirmed that overall, Credit Suisse was reporting its 12th consecutive quarter of year-on-year positive operating leverage and profit growth.
“We have continued to invest in our Impact Advisory and Finance activities, as we believe this is an area with large, positive effects globally and in which our clients are increasingly interested.
“We intend for this to become a growing part of our activities.”
The company believed that it was “well-positioned” to achieve further profitable growth, with clients benefitting from it integrated approach as it worked with them to provide solutions addressing both their asset and their liability requirements, Thiam added.
“Helping our clients achieve their objectives ultimately ensures that we create value for our shareholders.”
As at 1056 CET, shares in Credit Suisse were down 2.32% in Zurich, at CHF 12.42.