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February 7, 2013updated 04 Apr 2017 3:28pm

Pre-tax income up 71% but flat revenues for Credit Suisse

Credit Suisse Private Banking & Wealth Management posted a 71% rise in pre- tax income, but flat net revenues in the fourth quarter at CHF 3.3bn ($3.64bn) on a quarterly basis.

By Elsa Buchanan

Credit Suisse Private Banking & Wealth Management posted a 71% rise in pre-tax income, but flat net revenues in the fourth quarter at CHF 3.3bn ($3.64bn) on a quarterly basis.

Pre-tax income rose 71% on a yearly basis to CHF911m from CHF532, but decreased on a quarterly basis from CHF936 in Q3.

The pre-tax income benefit was the result of "strategic initiatives", said Credit Suisse.

Net revenues were up around CHF300m on a year-on-year basis.

The rise was mainly due to strong transaction and performance-based revenues primarily from higher performance fees and brokerage and product issuing fees, Credit Suisse said.

Credit Suisse announced the creation of a combined private banking & wealth management division by end-2015, to improve savings.

 

Sharp decline in net new assets

Assets under management (AuM) of CHF1.25bn were stable compared to 3Q12, and up around 6% year-on-year.

Net new assets fell on a yearly basis to CHF10.8bn from CHF46.6 in 2011, or a 76.8% decrease, due to adverse Western European outflows and the Clariden Leu integration.

Wealth management clients contributed net new assets of CHF 2.9bn, particularly from emerging markets and from ultra-high-net-worth individual (UHNWI) client segment, partially offset by outflows in Western Europe, the bank said.

 

Stable operating expenses

Total operating expenses of CHF2.3bn were stable from the Q3 as lower compensation and benefits, reflecting the efficiency measures, were offset by higher general and administrative expenses, mainly due to investments in IT infrastructure and seasonal expenses.

On a yearly basis however, the operating expenses were 5% lower.

The unit reported no litigation provisions down from CHF478m in 2011 when provisions were up in connection with German and US tax matters.

The wealth management unit also posted 5bps lower gross margin results at 110bps on a yearly basis, and stable compared to Q3.

"We made good progress in the fourth quarter in adapting our private banking & wealth management business to the new environment, capturing client momentum and improving profitability," said Credit Suisse CEO Brady Dougan about the wealth management business.

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