ZURICH (Reuters) – Credit Suisse said on Thursday that it was wrapping its global markets and investment banking divisions into a single unit, as Chief Executive Thomas Gottstein puts his first major strategic stamp on the bank.
Switzerland’s second-biggest bank also posted a 24% rise in second-quarter net profit to 1.162 billion Swiss francs ($1.27 billion), blowing past the mean estimate for 700 million Swiss francs in the bank’s own poll of 17 analysts.
“We are today announcing a series of strategic initiatives to improve effectiveness and to generate efficiencies,” Gottstein, who became CEO in February, said in a statement, as he unveiled the plan to merge the investment banking units.
The integration also includes its Asia-Pacific markets business, which previously sat under a regional division.
“These initiatives should also help to provide resilience in uncertain markets and deliver further upside when more positive economic conditions prevail.”
The bank said it was aiming to generate run-rate savings of approximately 400 million francs annually from 2022 onwards through various strategic measures announced.
Credit Suisse said it will also combine its compliance and risk functions under one head.
The bank said it was planning to pay the second half of its 2019 dividend later this year, adding its board would review its share buyback plans in due course.
Rival UBS earlier this month signalled the possibility of resuming share buybacks later this year after a stronger-than-expected performance from its investment bank helped it overshoot expectations for the quarter.
GOTTSTEIN’S MARK
The move to form a globally integrated investment bank marks a departure from the strategy under previous CEO Tidjane Thiam, who repositioned the lender to focus on wealth management and split the investment bank into two divisions.
Credit Suisse has faced criticism over the drag of its capital-intensive investment banking operations, which typically generate far less income than wealth management versus their costs, but has insisted the activities are necessary to service its ultra-wealthy clients.
Both its trading and dealmaking units have hurt results over recent years, with trading marking an improvement in late 2018, just as its dealmaking began to slide.
However the units performed well in the second quarter ahead of the integration, as a frenzy of trading activity and companies shoring up their balance sheet pushed up earnings.
The bank posted a 71% rise in profit at its global markets division, fuelled by a 42% jump in fixed income revenue.
The investment bank’s profit also jumped, with a strong rise in earnings across debt and equity underwriting as well as from advising on M&A deals – outperforming much of Wall Street which saw advisory revenue fall.
Wealth management, meanwhile, saw earnings flag slightly after bumper trading in the first quarter, with its international wealth management unit posting a 22% drop in profit as lower rates ate into margins and it set aside money for potential loan losses.
The bank’s Asia division posed a record quarterly profit of 298 million Swiss francs, driven by investment banking.
(Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields and Himani Sarkar)
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
