ZURICH (Reuters) - Credit Suisse boosted second-quarter net profit 78 percent as Switzerland’s second-biggest bank recovers after two years of losses.
Chief Executive Tidjane Thiam, in the job since July 2015, has restructured the bank to focus on wealth management and less on investment banking, while the Swiss lender has also been hit by billions in fines and write-downs.
After a 2.7 billion Swiss franc ($2.8 billion) loss for 2016, Credit Suisse posted on Friday its second straight quarter in profit, with net income for the three months to end-June rising to 303 million francs.
This was in line with the average forecast in a Reuters poll of eight analysts for 302 million francs.
“We are now midway through the execution of our three-year strategic plan and our strategy is working,” Thiam said in a statement.
Credit Suisse’s three wealth management businesses attracted net new money, a closely watched indicator of future earnings in private banking, of 22.8 billion francs in the first half of 2017.
Thiam is also trying to cut costs at the bank and Credit Suisse said it is on track to get its cost base below 18.5 billion francs in 2017.
The bank kept a cautious outlook for the rest of the year, saying it expects reduced volatility, geopolitical concerns and low client activity to continue to drag on businesses that rely on financial markets.
Having raised 4 billion francs from shareholders this year, Credit Suisse’s common equity Tier 1 (CET1) ratio rose to 13.3 percent from 11.7 percent at the end of the first quarter.
This narrowed the gap on Swiss rival UBS, which also reported second-quarter results on Friday and posted a CET1 ratio of 13.5 percent.
The CET1 ratio is a closely watched measure of balance sheet strength.
Credit Suisse’s bottom line was hit by a third straight quarterly loss of $7 million on a reported basis at its Asia Pacific markets business. Credit Suisse has said it is trying to boost performance there by cutting costs.
Global markets, Credit Suisse’s trading division which has been the source of large losses in the past two years, reported $267 million in pre-tax income compared to $156 million a year earlier.
editing by Brenna Hughes Neghaiwi and Michael Shields