Consistently inconsistent

3 Aug 2005 By Mike Verdin

A 37% fall in Q2 earnings is not just down to a legal charge. Revenues from fixed income trading and underwriting junk bonds slumped. The bank has forecast better market conditions. It needs to make the most of them to keep its share price rising.

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Credit Suisse reported earnings of SFr919m (E590m) for the second quarter, a fall of 52% on the first quarter and of 37% year on year. The figure included a pretax charge of SFr960m taken to boost reserves against legal risks.

Revenues were SFr3.3bn, 13% lower than in the first quarter but 6% higher year on year.

Oswald Grubel, the Swiss bank's chief executive, said that the slowdown reflected low levels of client activity in April and May.

The bank forecast a bright second half. We believe that equity markets will improve in the second half of the year after a shortterm correction of the recent uptrend, the bank said. Interest rates will most likely move in a narrow range. Credit Suisse is well positioned to benefit from this economic environment.

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