Warts and all

14 February 2017 By Dominic Elliott

The Swiss bank’s socking 2.3 bln Swiss franc fourth-quarter loss followed a charge to settle U.S. mortgage litigation. Equities trading and Asian investment banking were dismal. But private banking and balance-sheet resilience favour Credit Suisse’s stock over richer-priced UBS.

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Credit Suisse on Feb. 14 posted a 2.3 billion Swiss franc ($2.3 billion) fourth-quarter loss, worse than the average forecast for 2 billion francs compiled by the bank.

However, Credit Suisse's common equity Tier 1 capital as a proportion of its risk-weighted assets was 11.6 percent, above the 11.1 percent mean expectation among analysts.

In the three months to December, the Swiss bank suffered a net 2.4 billion Swiss francs in wealth management outflows. Chief Financial Officer David Mathers said it expected gross outflows of 9 billion Swiss francs over the course of 2017 as a result of regularisation of international tax regimes. Pre-tax profit margins and revenue margins on Credit Suisse's average assets under management were fairly stable from the end of September.

In a letter to shareholders, Chairman Urs Rohner and Chief Executive Tidjane Thiam said there had been positive inflows in wealth management at the start of 2017, and revenue from advisory, origination and fixed-income trading was up from the year-ago period, though it was down in equities trading.

Zurich-based Credit Suisse also said it will cut its headcount by a net 5,500 jobs in 2017 after more than 7,250 layoffs in 2016, as it works towards its 2018 cost-cutting target. The bank did not specify where the extra cuts would be.

By 0810 GMT, shares in Credit Suisse were trading at 15.28 Swiss francs, up 3.5 percent from the previous day's close.

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