Swiss bank
Credit Suisse Group reported net profit of 2.4 billion Swiss francs ($2.4 billion) for the third quarter, helped by strong returns on financial market trading and investment banking.
Thursday's figures beat analysts' predictions and vastly improved on a 1.26 billion franc loss during the same period a year ago, but doubts about the durability of the good results appeared to depress the stock price.
The bank said it had strengthened its capital base, shown strong profit margins and attracted new businees. Return on equity attributable to shareholders was 25.1 percent in the quarter and it attracted total net new assets of 16.7 billion francs in the period.
"Our third-quarter performance, including our strong return on equity...shows that our approach continues to work well and is providing the foundation for sustainable, high-quality, lower volatility earnings," said Chief Executive Brady W. Dougan.
Dougan said
Credit Suisse has accelerated since last year the implementation of its client-focused business model that reduces risk.
The company has a Tier 1 ratio of 16.4 percent — a key measure of financial solidity — and is positioned to prosper in the new competitive landscape, he said. Dougan and Chairman Hans-Ulrich Doerig said in a letter to shareholders that the bank's capital position was among the best in the industry.
The bank said its net revenues for the quarter were 8.9 billion francs, 195 percent higher than the 3 billion francs for the same period last year.
Analysts expressed surprise at the net income, which exceeded the consensus forecast of 1.65 billion francs.
Teresa Nielsen of Swiss bank Vontobel said the profit figures were "unexpectedly high" and that
Credit Suisse's capitalization had improved "surprisingly strongly."
Andreas Venditti of Zuercher Kantonalbank said
Credit Suisse could profit again from a good environment in investment banking, but he said the competition would become much more demanding next year.
Peter Thorne of the Geneva broker Helvea questioned how sustainable the good results will be once competitors re-enter the markets with more force.
Credit Suisse's share price dropped in trading Thursday, sliding 3.33 percent to 58.05 francs.
It said its private banking business had a pretax income of 867 million in the quarter, with inflows in international and Swiss businesses.
That is down 7 percent from the second quarter this year, due to a 4 percent drop in net revenues to 2.8 billion francs, mainly due to lower net interest income. The private banking pretax income was up 10 percent on the year.
Private banking had 902 billion francs of assets under management, it said.
The investment banking division reported income before taxes of 1.7 billion francs in the quarter, compared with a loss of 3.2 billion francs in the third quarter of 2008. The current result was a 5 percent improvement over the previous quarter of this year.
The sector's net revenues were 5.05 billion francs, driven by good results in global fixed income markets, cash equities, and investments in the U.S.
The bank said its asset management unit reported income before taxes of 311 million francs in the third quarter compared with a 109 million franc loss in the same quarter of last year.
