Credit Suisse sees overhaul bearing fruit this year
By Katharina Bart
ZURICH (Reuters) - Credit Suisse said it expects steps taken to overhaul its business will bear fruit this year, after fourth-quarter profit missed forecasts because of weak results at its investment bank.
Like peers, Credit Suisse is cutting back riskier assets and reducing costs to meet tougher regulations aimed at preventing a repeat of the 2008 financial crisis. But unlike hometown rival UBS it is not withdrawing from fixed income.
Pretax profit at the investment bank dropped 38 percent, with low levels of business activity in both its fixed-income and equity arms. However, that was still better than the fourth-quarter losses reported by UBS and Deutsche Bank at their investment banks.
"The main disappointment with the results come from the investment bank," said Kepler Capital Markets analyst Dirk Becker. "But it was still the best result among the European investment banks."
Overall, Credit Suisse made fourth-quarter net profit of 397 million Swiss francs ($436 million), missing analysts' average forecast of 645 million in a Reuters poll. It took 304 million francs in charges related to its own debt.
Chief Executive Brady Dougan said on Thursday steps taken to boost capital and cut risks and costs were starting to pay off:
"Going into 2013, revenues have so far been consistent with the good starts we have seen to prior years, with profitability further benefiting from the strategic measures we took in 2012."
The Zurich-based bank said it would cut costs by 4.4 billion francs by the end of 2015, up from a previous 4 billion target, by folding its asset management unit into its private bank and by moving some jobs offshore. Continued...