Credit Suisse Group reported its first annual profit since 2014 and its highest fourth-quarter adjusted pre-tax income since 2013.
The results follow a three-year restructuring program under CEO Tidjane Thiam. As a result of the program, Thiam announced a share buyback programme which began last month.
“The main goal was to pivot from investment to wealth management which we consider more attractive and less capital intensive,” Thiam said at the bank’s results presentation today.
The move to wealth management was to increase and stabalise revenues at the Swiss bank. “Our revenues are much less volatile than they use to be,” Thiam said.
While the group’s net revenues fell 7% to CHF4.8bn from CHF5.19bn in the previous year, net income attributable to shareholders was CHF292m for the fourth quarter of 2018 versus a loss of CHF2.12bn previously.
Total operating expenses dropped 18% to CHF4.11bn on a year-on-year basis.
For the 12 months to December 2018, the group posted a net profit of CHF2.05bn, versus a net loss of CHF983m in 2017.
“We delivered a profit in one of our most challenging fourth quarters in years, with an adjusted pre-tax income of CHF 846 million, up 49% year on year,” Thiam said
International Wealth Management
The International Wealth Management unit registered a pre-tax income of CHF410m in the fourth quarter of 2018, a 21% jump from CHF340m a year ago.
Net revenues at the division rose 3% year-on-year to CHF1.4bn.
Swiss Universal Bank
The group’s Swiss Universal Bank unit posted income before taxes of CHF531m for the three months to December 2018.
This marks a 23% slump from CHF433m in the comparable quarter in 2017.
The division’s net revenues were CHF1.37bn, up 4% from CHF1.32bn last year.
However, wealth management in Switzerland is up 12% over the last three years, Thiam said.
Asia Pacific lags
Pre-tax income at Credit Suisse’s Asia Pacific arm was CHF37m in the fourth quarter of 2018.
This is a plunge of 79% from CHF176m in the same quarter last year.
Net revenues at the division dropped 24% to CHF677m from CHF885m a year ago.
“Asia was interesting. We’ve been resilient. We’re one of the only bank showing positive income in Asia,” Thiam said today. “In emerging markets, it’s even more striking; we have grown revenue in every region.”
Well positioned for challenging times
The result of the three year restructuring has made Credit Suisse well positioned for “challenging market conditions”, Thiam said.
“Suddenly the world economy is very confusing. People need very sophisticated products…this is a good period for people who advise.”
The focus on wealth management will also ensure more robust revenues as the global economy faces increasing headwinds, Thiam believes: “Our model has been proved resilient in very challenging market conditions”.