Credit Suisse may have swung back into the black in the second quarter – but investors were still cautious.
The banking giant reported income before taxes of CHF 199m (£153m) for the second quarter of 2016, swinging back into profit compared with a loss of CHF 484m for first quarter of the year but down a massive 88 per cent compared with income of CHF 1.7bn in the second quarter of 2015.
Meanwhile, net revenues came in at CHF 5.1bn, up 10 per cent from CHF 4.6bn in the quarter before but down 27 per cent from just shy of CHF 7bn last year.
Not surprisingly, shares were down 3.4 per cent in late morning trading at CHF 11.20.
Why it's interesting
Here's yet another European lender which has been buffeted by market volatility: shares are down 60 per cent since this time last year, thanks to everything from panic over China's economic growth and panic over Europe's economic growth to, you guessed it, panic over Brexit.
That led to the lender reporting its first annual loss in eight years back in February.
Chief executive Tidjane Thiam (who, lest we forget, was once the man from the Pru), has done an admirable job of trying to cut those losses. Not only has he steered it away from the notoriously unpredictable investment banking market, but he's also tried to manage shareholders' expectations.
But such bold moves aren't without their financial costs. The bank booked CHF 255m in restructuring expenses through its accounts last quarter and CHF 91m through in the most recent quarter.
In April, Thiam warned that "financial performance in 2016 [will] continue to be affected by restructuring initiatives" – but that was without any drop in confidence caused by Brexit vote, which he today said had led to "challenging conditions". In other words: hold tight.
What Credit Suisse said
Credit Suisse continued to serve and support clients against a challenging backdrop.
Markets were particularly challenging towards the end of the second quarter of 2016 in connection with the UK referendum on EU membership. Careful planning and coordination of our trading, risk and support functions proved effective in the run-up to the referendum and on the day itself. On that day, we were able to handle significantly increased volumes and provided quality execution for our clients.
Despite improved results, the bank faces a rocky road ahead.