Credit Suisse joins bumper profits haul
Credit Suisse became the latest banking giant to rack up strong profits yesterday, although its shares fell on fears that rivals may gate-crash the party.
The Swiss bank posted a net profit of Sfr2.4bn (£1.4bn) in the three months to September, its best quarter this year and comfortably above analysts’ expectations of Sfr1.6bn.
Buoyant financial markets and improved market share in investment banking helped boost the results, which followed strong earnings at US investment banking rivals JP Morgan and Goldman Sachs.
The group’s investment banking unit boosted third-quarter pre-tax profit by five per cent to Sfr1.7bn (£1.02bn) against the second quarter.
Credit Suisse, which managed without state aid in the credit crisis, was optimistic despite the recession.
“If markets remain constructive, we expect to be able to maintain our momentum,” chief executive Brady Dougan said.
Analysts welcomed the results, but questioned how long the good times would last in the face of a renewed challenge from investment banking rivals.
Heleva analyst Peter Thorne said: “Whilst the good investment banking results were no fluke, investors will continue to ask how sustainable the good margins are likely to be once competitors re-enter the markets with force.”
The shares have outperformed those of rivals UBS and Deutsche Bank in the year to date, but shares in the group fell 3.5 per cent to Sfr57.95 yesterday.
Credit Suisse posted the results two days after unveiling a new pay structure, increasing executive salaries to make up for new regulatory limits on bonuses.
The changes, including plans to link deferred bonuses to performance and the share price, will take effect from January and apply to about 7,000 staff – 15 per cent of the bank’s workforce.