* Q1 net profit forecast at 1.255 bln Sfr vs 44 mln yr-ago
* Focus on cost cuts, risk-weighted assets, capital
* C.Suisse one of first European investment banks to report
By Katharina Bart
ZURICH, April 23 Credit Suisse is
forecast to report an increase in first-quarter net profit on
Wednesday, supported partly by a rise in sales and trading
revenue from its investment bank.
"We expect the investment bank to deliver good first quarter
results," Bank Vontobel analyst Teresa Nielsen said.
The first quarter is traditionally a strong one for
investment banks, but in the United States investment banks'
first quarter was not so healthy.
Wall Street's big five banks have reported investment bank
revenues down 7 percent on the year, although they were up 35
percent on a weak fourth quarter.
Morgan Stanley, for example, reported a 14 percent
drop in adjusted earnings last week as its bond trading unit
Credit Suisse results will provide the first taste of how
big European investment banks have fared. Barclays also
reports on Wednesday.
Like other big banks, Credit Suisse has to meet tougher
regulations aimed at preventing a repeat of the 2008 financial
crisis. This involves cutting back on risk and strengthening
The bank is expected to have made progress in the quarter in
cutting higher-risk assets. These stood at 924 billion Swiss
francs in the fourth quarter already within striking distance of
a year-end target of 900 billion francs.
Unlike hometown rival UBS, Credit Suisse is not
withdrawing from fixed income but is having to make major cost
cuts. In February, the bank increased its target for spending
cuts to 4.4 billion francs by the end of 2015, up from a
previous 4 billion target.
Credit Suisse on Tuesday said it is selling a private equity
business to Blackstone Group, part of an effort to boost
capital by 15.3 billion Swiss francs ($16.25 billion) after a
call from the Swiss National Bank.
Last year, the bank paid its dividend largely in stock and
said it expected to raise key capital ratios by mid-year, which
would, in turn, allow a return to an all-cash payout.
Credit Suisse's net profit for the quarter is forecast by
analysts in a Reuters poll at 1.255 billion francs, compared
with 44 million francs in the year-ago quarter. Then, Credit
Suisse booked 1.5 billion francs in own debt charges.