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Home / Business / Credit Suisse Earnings 2nd Quarter 19

Credit Suisse Earnings 2nd Quarter 19



Credit Suisse reported a net income of 937 million Swiss francs ($ 945 million) for the second quarter of this year, beating analysts' expectations.

Analysts polled by Reuters expected a net profit of CHF 720.3 million ($ 726.13 million) for the second quarter of 2019.

The Swiss bank had reported a net profit of CHF 647 million in the same period period one year ago.

Here are some of the key highlights of the quarter: [19659006] Pre-tax income was CHF 1.3 billion versus CHF 1.1 billion a year ago

  • Return on tangible equity was 9.7% against 6.9% a year ago
  • CET1
    ratio reached 12.5% ​​versus 12.8% a year ago
  • The Swiss lender surprised analysts on Wednesday by achieving a return on tangible equity (ROTE) of almost 10% ahead of expectations. ROTE measures the bank's ability to handle potential losses. The louder the ROTE, the more sound the bank is considered to be.

    The bank achieved this figure for the first time since the restructuring drive was introduced in the fourth quarter of 2015.

    The logo of the Swiss banking giant Credit Suisse is seen on October 17, 2017 in Zurich.

    Fabrice Coffrini | AFP | Getty Images

    In a speech to CNBC's Carolin Roth, Thiam said: "We also think we can go much higher on it (ROTE) … and that is a function of the growth in asset management in particular."

    The bank's international asset management division grew from one year ago. It reported net income of CHF 444 million for the second quarter of 2019, compared with CHF 433 million a year ago.

    Credit Suisse said that wealth management "delivered robust results in the second quarter with stronger capital raising following the decline experienced in the first quarter of the year."

    & # 39; Not a fan of low interest rates & # 39;

    At the end of the previous quarter, Tidjane Thiam, CEO of Credit Suisse, told CNBC that there was a cloud of uncertainty about the bank's performance this year. The Swiss lender cited geopolitical and macroeconomic uncertainty as a potential risk of client activity.

    However, in its latest report, Credit Suisse said that the second quarter saw a "more supportive environment" on the back of optimism over Sino-American trade talks and dismal comments from central banks. Both the European Central Bank (ECB) and the US Central Bank have signaled that more stimulus is needed to boost their respective economies.

    Market expectations point to a cut in interest rates in the United States on Wednesday, when the Federal Reserve announces its latest policy decisions. There is also a market consensus that the ECB will cut interest rates at its next meeting in mid-September. Both central banks have recently tried to reduce the stimulus to their economies since the sovereign debt crisis, but economic data still show weaknesses.

    Thiam told CNBC, "I'm not a big supporter of low interest rates, a big believer in the importance of saving in the economy. Adding debt to debtors and punishing savers, I believe in the long run is hurting the economy." [19659003] Low interest rates stimulate borrowing.

    Uncertainty ahead

    Looking forward to the third quarter, Credit Suisse said that so far there have been "healthy levels" of client engagement, but it remains to be seen "if this will be activity".

    "We must also emphasize that we expect the regular seasonal decline in revenue," the bank said in a statement on third-quarter results due to the holiday season.

    Credit Suisse started a repurchase program in early 2019, with the goal of buying 1 billion Swiss francs by the end of 2019.

    Credit Suisse's shares are more than 25% over a 12-month period.


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