By Brenna Hughes Neghaiwi
ZURICH (Reuters) – Credit score Suisse (SIX:) set a optimistic tone for this quarter’s European financial institution outcomes on Wednesday, lifting its web revenue as good points in equities and deeper ties between buying and selling and personal banking helped offset decrease income.
Switzerland’s second-biggest financial institution bucked market expectations of a revenue dip and stated it gained market share in equities buying and selling throughout 1 / 4 by which main U.S. rivals similar to Goldman Sachs (NYSE:) and Morgan Stanley (NYSE:) noticed income slides on this enterprise.
Its International Markets buying and selling unit, the main focus of a lot criticism in recent times, elevated fairness buying and selling, with Chief Government Tidjane Thiam saying Credit score Suisse was “shifting up the ranks in equities”. However a slide in its Asian unit introduced general group income from equities gross sales and buying and selling down by 5 %.
Wednesday’s outcomes additionally included a forecast that Credit score Suisse was cautiously optimistic in regards to the second quarter.
Though Credit score Suisse final 12 months wrapped up a three-year overhaul with its first annual revenue since 2014, unstable earnings and excessive headcount in its buying and selling division meant it confronted questions over whether or not it was downsized sufficient.
“International Markets has been the primary reason for consensus earnings downgrades over the previous 12 months and with these outcomes has now proven indicators of stabilizing,” Citi analysts stated.
Nevertheless, within the first quarter Credit score Suisse stated the unit elevated fairness gross sales and buying and selling by four %, whereas fixed-income gross sales and buying and selling fell by simply 2 %, notably lower than at U.S. funding banks.
Credit score Suisse shares rose by greater than Three % to a six-month excessive following the outcomes, by which it confirmed its full-year profitability goal however famous it might want supportive markets, and a pickup in revenues, to hit its targets.
Final month Swiss rival UBS forecast first-quarter revenues would fall by a few third in its funding financial institution and by 9 % in wealth administration, its largest enterprise.
UBS is seeking to lower prices additional as CEO Sergio Ermotti sounded a pessimistic be aware on profitability for the 12 months.
Analysts count on first-quarter revenue at UBS, which is Switzerland’s largest financial institution, to have almost halved when it reviews on Thursday.
(This story corrects web revenue determine to 749 million Swiss francs in first bullet level, provides dropped phrase “group”, paragraph 3)
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