Credit Suisse beats forecast, eyes cash dividend

Wed Apr 24, 2013 3:42am EDT
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By Katharina Bart

ZURICH (Reuters) - Credit Suisse CSGN.VX said its drive to cut costs, risky assets and focus on its investment bank were bearing fruit as its quarterly earnings beat analysts' expectations and it raised the prospect of a cash dividend this year.

The results are a boost to the Swiss bank's argument that its slimmed-down investment bank can prosper despite lacking the scale of Wall Street giants like JP Morgan (JPM.N: Quote) and Goldman Sachs (GS.N: Quote). Swiss rival UBS UBSN.VX is largely pulling out of fixed income to focus on private banking.

Credit Suisse said on Wednesday first-quarter investment bank net revenues were stable versus a year ago, contrasting with weaker trading revenues at Wall Street's top five banks.

But some analysts were cautious of drawing conclusions.

"It's a better quarter than expected, particularly in the investment bank, but one swallow doesn't make a summer," said Rainer Skierka, Zurich-based analyst for private bank Sarasin.

"For me, Credit Suisse's strategy is going to lead to more volatile results than those of UBS or someone focused on private banking. It's up to investors to decide which they prefer."

At 0730 GMT, Credit Suisse shares were up 0.5 percent at 26.59 Swiss francs, in line with the European banking index . The stock has risen 19 percent this year, beating UBS's 7.2 percent gain and a 2.5 percent rise in the sector index.

Credit Suisse reported first-quarter net profit of 1.30 billion Swiss francs ($1.38 billion), up from 44 million francs a year earlier. The result topped the average estimate of 1.26 billion francs in a Reuters poll Of analysts.   Continued...

The logo of Swiss bank Credit Suisse (CS) in seen in front of an office building at the Bahnhofstrasse in Zurich April 18, 2013. REUTERS/Arnd Wiegmann