Tags: Credit | Suisse | Profit | Bank

Credit Suisse Posts Strong Profit of $1.5 Billion as Bank Shows 'Resilience'

Thursday, 22 Jul 2010 11:55 AM

Credit Suisse Group on Thursday reported a 1 percent rise in second-quarter net income as the bank performed well despite difficult business conditions taking a toll on its investment banking unit.

The Zurich-based bank said profits rose to 1.6 billion Swiss francs ($1.5 billion), beating the expectations of analysts. Net revenues declined 2 percent to $8.4 billion francs, but total operating expenses were also down.

"This was a resilient performance during a difficult second quarter for the banking sector," said Brady Dougan, Credit Suisse's CEO. He credited the bank's new assets in private banking and continued gains in market share for the positive result.

But income from Credit Suisse's investment banking was less than half what it was a year ago, shrinking to 784 million francs.

Private banking fell 7 percent to 874 million francs, while profits at Credit Suisse's wealth management unit tumbled 17 percent to 633 million francs.

The bank has held up well since financial markets collapsed in September 2008, outshining its crosstown rival UBS AG, but analysts were keen to see how it would deal with a number of looming challenges.

Margins at Credit Suisse's hugely important wealth management business held up well, after falling in the January-March period, easing some concerns.

And it was difficult to gauge the effect of pressure from German authorities on net cash, as tax evaders and others consider pulling their money out. Some analysts believe the recent police raids at Credit Suisse's German branches will have a stronger negative impact in the next quarter.

The bank said it posted 13.8 billion francs in new customer deposits during the April-June period, with international clients leading the way. The so-called net new money figure is a closely watched indicator of future business in the banking industry. It totaled 26 billion francs a year ago.

Crosstown rival UBS reports its second-quarter profits next week.

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