Credit Suisse private banking, wealth management division’s pre-tax income up 9% in Q3 Credit Suisse’ private banking and wealth management division has reported pre-tax income of CHF1.02 billion (US$1.14 billion) for the third quarter of 2013, an increase of 8.76% from CHF936 million (US$1.05 billion) reported a year ago.
Net revenues for the quarter were CHF3.32 billion (US$3.72 billion), a marginal increase of 0.6% from CHF3.30 billion (US$3.70 billion)in the corresponding quarter of 2012. Credit Suisse CEO, Brady Dougan, said while the company is making good progress toward previously announced targets, net revenue results were impacted by the ongoing low interest rate environment and low client activity
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"We continued to see strong net asset inflows with CHF 8.1 billion in the quarter," Dougan added.
"These inflows were driven by high-margin Asset Management products as well as by our emerging markets and ultra-high-net-worth client franchises, partially offset by outflows in the Western European cross-border business."
The private banking and wealth management division reported net new assets of CHF8.1 billion (US$9.08 billion) in the third quarter of 2013, with strong contribution from high-margin asset management products, emerging markets and the ultra-high-net-worth individual client segment.
The bank’s asset management unit reported net revenues of CHF662 million (US$742.7 million) in the latest quarter, up 7% from the year ago quarter. Following these results, Suisse intends to re-establish the structure of the former Asset Management division.
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By GlobalDataIn the third quarter of 2013, assets under management (AUM) were at CHF 1,268.2 billion, 2.2% lower compared to the previous quarter.
Total operating expenses in the wealth management and private banking division decreased compared to the second quarter and last quarter, mainly driven by an expense provision in the second quarter relating to the withholding tax treaty between Switzerland and the UK and compensation and benefits, which were lower compared to the second quarter and slightly lower compared to the third quarter.
Overall, the Swiss group reported a third-quarter profit of CHF454 million (US$509 million), up from CHF254 million between July and September 2012.
Planning ahead
In its latest financial report, Credit Suisse confirmed its plans to increase presence in emerging markets in Asia and Latin America.
The new unit will also include operations relating to the small markets initiative, selected legacy cross-border related run-off operations and litigation costs, primarily from the US.
Dougan explains how the division will continue to advance: "We are accelerating our wind-down strategy and enhancing our disclosure through the creation of non-strategic units within each of our two divisions." Dougan believes this shall enable the company more management time to focus on business growth.
