Credit Suisse profits higher than forecast

CREDIT Suisse delivered a solid first-quarter performance yesterday only marred by a large debt writedown that pulled profits down 45 per cent.

Strong revenues in its investment banking division and healthy fund inflows generated group pre-tax profit of SwFr1.6bn Swiss francs (£1.1bn), higher than the consensus forecast for SwFr 1.5bn.

However, its profit was down from the SwFr2.9bn recorded in the same quarter in 2010 as it wrote off SwFr617m from its own debt and related derivatives after issuing and selling about £6.5bn of contingent convertible (co-co) bonds in the quarter. The strength of the Swiss franc against the dollar and euro also hindered the bank’s performance – BNP Paribas analyst Olivia Frieser pointed out that the 25 per cent fall in group profit would have been 15 per cent in dollar terms.

“In a quarter marked by significant market uncertainty we have maintained our strong momentum with clients, gaining market share and generating SwFr19.1bn net new assets,” said chief executive Brady Dougan.

Credit Suisse’s investment banking arm turned in a strong performance, generating a SwFr1.3bn pre-tax profit on revenues of SwFr4.9bn. While profit fell 25 per cent compared with the same quarter in 2010, it beat market expectations of SwFr1.2bn, while revenues fell only six per cent.

“Underwriting, advisory and equities were below expectations, but fixed income, currency and commodities (FICC) above,” said Frieser.

Pre-tax profit at its private banking division fell eight per cent to SwFr855m from SwFr892m in 2010, while its asset management arm saw profits rise four per cent year-on-year to SwFr172m from SwFr166m in 2010.