Change agent

23 July 2015 By George Hay Follow @gfhay

The Swiss bank did well in wealth management and Asia, where new CEO Tidjane Thiam is likely to focus. The investment bank, which may need further pruning, is holding up. The good vibes will help investors feel better about a looming strategic revamp – and a potential cash call.

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Credit Suisse reported second-quarter pre-tax income of 1.6 billion Swiss francs ($1.7 billion) on July 23, compared to a 370 million Swiss franc loss in the same period in 2014.

The Swiss bank’s private banking and wealth management arm recorded pre-tax income in those parts it intends to keep of 1 billion Swiss francs and a return on regulatory capital of 26 percent. The equivalent parts of its investment bank saw pre-tax income of $968 million, and a return on regulatory capital of 16 percent.

The bank’s core Tier 1 ratio was 10.3 percent against 10 percent at the end of the first quarter, while its Tier 1 leverage ratio was 3.7 percent. The investment bank achieved $81 billion of leverage reduction in the first six months of the year.

Second-quarter net revenue in the strategic parts of the investment bank was $3.8 billion, down 1 percent compared to both the first quarter and the second quarter of 2014. Net revenue from fixed income sales and trading fell 18 percent quarter-on-quarter to $1.5 billion, or 10 percent year-on-year. Net revenue from equity sales and trading fell 1 percent quarter-on-quarter to $1.4 billion but rose 12 percent year-on-year, while advisory rose 60 percent and 22 percent respectively.

Credit Suisse shares traded at 28.3 Swiss francs as of 1000 BST on July 23, up 5.5 percent.

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