Dougan out on a high: Credit Suisse profits jump as Thiam steps up
OUTGOING Credit Suisse chief executive Brady Dougan delivered a healthy rise in profits for the first quarter, in his final presentation of financials to the market.
The wealth management and market trading businesses performed particularly strongly.
But investors and analysts were not impressed by the results, and the share price fell on the expectation that incoming chief Tidjane Thiam may need a rights issue to restore the lender’s capital position.
Profits for the quarter came in at 1.05bn Swiss francs (£737m), up 23 per cent on the same period of 2014.
Wealth management income grew by 10 per cent, but its division – private banking and asset management – saw revenues fall eight per cent to SFr3bn, and pre-tax profits fall 18 per cent to SFr834m.
Investment banking revenues rose five per cent to SFr3.6bn, and profits climbed to SFr945m.
Debt and equity underwriting revenues slipped, as did advisory fees.
But fixed income sales and trading revenues climbed nine per cent to SFr1.7bn, and equity sales and trading revenue rose 11 per cent to SFr1.3bn.
However, a fall in the common equity tier one capital ratio – a measure of the bank’s protective buffers – from 10.1 per cent a year ago to 10 per cent in the first quarter.
“We think an investment bank shrinkage will solve the capital as well as leverage issue and move Credit Suisse towards more wealth management gearing and a hence higher multiple,” said JP Morgan analyst Kian Abouhossein. “Investors
in our view may wait for the new CEO to give guidance in July when he starts.”
Its shares fell 2.05 per cent.