Credit Suisse’s staff cuts shore up weak profits

Tim Wallace
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SWISS giant Credit Suisse saw profits rise in the final quarter of 2012 with falling staff costs helping the bank through a year of tough reforms in the industry, its financial results showed yesterday.

But weak investment bank revenues and a slight drop in wealth management earnings meant the rise in profits disappointed analysts, and the year as a whole saw lower profits than 2011.

Pre-tax profits came in at SFr397m (£275.6m) in the final three months of 2012, up from SFr254m in the previous quarter and a loss of SFr637m in the fourth quarter of 2011.

For the year as a whole profits slipped to SFr1.83bn, down 24 per cent from SFr1.953bn in 2011.

Operating expenses fell five per cent in the year, but net revenues dipped seven per cent, accounting for the fall in profits.

Net new assets under management dipped 76.8 per cent on the year while profits at the investment bank dropped 38 per cent to SFr298m on low levels of business activity in fixed income and equities.

But the bank managed to cut 2300 staff in the year, bringing its headcount down five per cent to 47,400.

And it reduced its risk-weighted assets by SFr99bn to SFr924bn, derisking the business and cutting its capital needs.

That takes the bank within touching distance of its SFr900bn target it hopes to hit at the end of 2013.

The bank’s shares dipped 3.11 per cent on the day as the results missed analysts’ hopes.