Credit Suisse profit tumbles

 
City A.M. Reporter
Credit Suisse's third-quarter net profit tumbled 74 per cent to miss forecasts, as sluggish equities trading halved investment banking earnings from the previous quarter.

Switzerland's No.2 bank by market value behind UBS said net profit fell to 609m Swiss francs (£398m).

Investment banking pretax income halved to 395m francs from an already subdued 784m the previous quarter, as chief executive Brady Dougan's bold strategy to hire investment bankers aggressively in the second quarter failed to pay off immediately with markets flattening.

CS was the first big European bank to report third-quarter numbers after US rivals such as Goldman Sachs posted higher than expected profit this week despite low trading volumes in the US equity market, though Morgan Stanley, which has derisked its trading operations since the credit crisis, surprised with a disappointing loss.

Earnings at CS's bedrock private bank outstripped the normally more lucrative investment banking segment for a second quarter running.

"We believe the prospects for growth remain very attractive and our private bank is poised to capitalise as markets improve," Dougan said.

The private banking segment attracted 12.6bn francs in net new client assets, against 13.1bn a year earlier.