ZURICH (dpa-AFX) - Swiss lender Credit Suisse Group (CS) reported Wednesday a sharp decline in first-quarter profit, hurt mainly by weak performance in its investment banking segment, despite improved results in Private Banking & Wealth Management businesses.
For the first quarter, net income attributable to shareholders decreased 34 percent to 859 million Swiss francs from 1.303 billion francs in the previous year. Earnings per share fell to 0.48 franc from 0.75 franc. Including non controlling interests, net income dropped 12 percent to 1.22 billion francs.
In Investment banking, strategic businesses' pre-tax income fell 27 percent mainly due to weakness in emerging markets and global macro products.
On a strategic basis, attributable net income dropped 11 percent to 1.40 billion francs.
Pre-tax income margin dropped to 25.5 percent from prior year's 26.4 percent. Core pre-tax income margin declined to 21.6 percent from 25.7 percent a year ago.
Net revenues on a reported basis declined 4 percent year-over-year to 6.829 billion francs. Core net revenues dropped 8 percent to 6.47 billion francs, and net revenues in the strategic businesses declined 7 percent to 6.55 billion francs. The company generated nearly flat revenues in private banking and wealth management business, while investment banking revenues declined 13 percent mainly due to significantly reduced seasonal contribution from rates and certain emerging markets.
In the quarter, core net interest income climbed 21 percent to 2.18 billion francs, and commissions and fees edged up 1 percent to 3.28 billion francs. Meanwhile, trading revenues plunged 65 percent from last year.
Provision for credit losses climbed 55 percent from last year to 34 million francs, primarily reflecting net provisions in Private Banking & Wealth Management. Total operating expenses declined 3 percent.
Assets under management of 1.29 trillion francs declined 1.5 percent from last year, but increased 0.8 percent sequentially with net new assets and positive market movements. These were partially offset by structural effects mostly arising from disposals of businesses in the non-strategic unit, and adverse foreign exchange-related movements.
For the quarter, the company's return on equity was 14 percent in its strategic businesses, well within reach of its 15 percent through-the-cycle-target.
In Zurich, Credit Suisse shares closed Tuesday's trading at 27.83 francs, up 0.02 francs or 0.07 percent.
Copyright RTT News/dpa-AFX