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CS reports Q3 jump, faces down break-up campaign

Thursday, November 02, 2017 - 01:43

Credit Suisse earnings mark the first time the bank has posted three consecutive profitable quarters under CEO Tidjane Thiam, who pledges his determination to thwart activist efforts to split the company. David Pollard reports.

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Slow progress to recovery for Europe's banks. But Credit Suisse is, it seems, getting there. After six and half billion swiss francs of losses in 2015 and 2016, it's now reporting a third quarter of profits. And a sixfold jump in net income that's nudged its share price up by two per cent. Answering calls for it to be split up, CEO Tidjane Thiam says it shows the bank's 'integrated model' is attractive. Hedge fund RBR Capital wants it cut into three pieces: investment, asset management - and wealth management, which would also accommodate retail and corporate banking. Analysts, though, are scanning the wider sector and its latest earnings. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: We're seeing a banking sector which is perhaps beginning to emerge from the dreadful period that we've endured over the course of the last nine years in the sense that they have to make fewer provisions which tends to boost the bottom line numbers. Net new money inflows are up eight per cent year on year. But down is Credit Suisse's Tier 1 capital ratio - to 13.2 per cent. And - like many others - its market trading is still under pressure .... Income dropping to 73 million dollars from 92. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: The trading activities continue to suffer as a consequence of the ongoing low interest rate policies adopted by central banks .... Cost cutting will remain the order of the day. We have a lot of regulatory issues to deal with. So we are by no means out of the woods. While still in the woods are activist investors - Thiam due to meet RBR next week. It currently holds a stake of around one hundred million dollars in Credit Suisse ... And has said it wants to raise that to around one billion.

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CS reports Q3 jump, faces down break-up campaign

Thursday, November 02, 2017 - 01:43