Credit Suisse’s private bank and wealth management unit has posted a pre-tax income of CHF647m for the third quarter of 2015, a decline of 31% compared to the same period a year ago.
Net revenues were CHF2.93bn, a decrease of 6% from CHF3.12bn in the third quarter of 2014.
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The unit’s total operating expenses at end of third quarter stood at CHF2.2bn, up 2% compared to CHF2.15bn in the corresponding quarter of 2014.
The strategic businesses of private banking & wealth management recorded pre-tax income of CHF753m with stable net revenues of CHF2.91bn, slightly higher expenses and an increase in provision for credit losses mainly in Corporate & Institutional Clients compared to the third quarter of 2014.
The unit reported total net new assets of CHF16.4bn, with wealth management clients contributing net new assets of CHF10.5bn with growth in all regions and balanced contributions from all client segments.
The division’s assets under management dropped to CHF1293.9bn at the end of third quarter of 2015, mainly due to unfavourable market conditions and the introduction of updated assets under management policy.
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By GlobalDataThe group said that wealth management clients reported a net margin of 23 basis points, 2 basis points lower than in the third quarter of 2014, as both quarters were impacted by litigation provisions.
Risk-weighted assets at the unit grew to CHF108.3bn, mainly driven by positive foreign exchange movements, model updates and methodology changes, and its leverage exposure decreased by CHF7.2bn to CHF373bn.
Overall, Credit Suisse Group reported a core pre-tax income of CHF861m for the third quarter compared to CHF1.03bn in the year ago quarter. Core net revenue decreased 8% year on year.
Credit Suisse CEO Tidjane Thiam said: "In the third quarter, difficult market conditions led to low client activity in both our Investment Banking and Private Banking & Wealth Management divisions. This translated into lower profits and was particularly visible in our fixed income sales and trading performance.
"The reduction of the capital allocation to the Investment Bank continued, with USD 615.4 billion of leverage exposure at the end of 3Q, thus achieving the year-end 2015 target that was announced in February 2015. We made good progress in our Private Banking & Wealth Management division with strong net new asset inflows across all regions.
"Our third-quarter results reinforce the need for a restructuring of the bank aimed at reducing the volatility of our earnings and better aligning the activities of our Investment Bank behind the needs of the clients of our Private Banking & Wealth Management division," he added.
