Credit Suisse Starts Last Year of Revamp With Rise in Profit -- 2nd Update

By Pietro Lombardi 

Credit Suisse Group AG on Wednesday posted a strong rise in first-quarter net profit, beating expectations and bolstering evidence that the Swiss lender's yearslong restructuring has put it back on track to growth.

Net profit grew 16% to 694 million Swiss francs ($709.1 million) as revenue rose 1.8% to 5.64 billion francs. Analysts had expected Credit Suisse to report net profit of 653 million francs on revenue of 5.49 billion francs.

Credit Suisse shares were up 5.3% in morning trading.

The results kick off a crucial year for the Swiss bank, which reported its third-consecutive annual loss in 2017 after a charge related to U.S. tax reform hit its fourth-quarter results. The lender is in the last of a three-year overhaul, shifting its emphasis toward wealth management from investment banking.

"With these first-quarter results, we got off to a good start in our third and final year of restructuring," Chief Executive Tidjane Thiam said in the results announcement. In a conference call, he said he expected the bank to accelerate its performance in 2018.

The bank said it is confident of the potential of its wealth-management operations, as well as its investment-banking and capital-markets division. The bank expects lower costs and higher returns to allow it to increase payouts to shareholders over time, Mr. Thiam said.

But Credit Suisse warned that markets would be exposed to periods of heightened volatility due to global trade negotiations, monetary policy tightening and other geopolitical events.

"Client activity levels remain sensitive to these factors, specifically within our more market dependent activities," Credit Suisse said.

Morgan Stanley said the results were good, with wealth management making an especially strong showing.

In the quarter, Credit Suisse's wealth-management division reported a 45% increase in adjusted pretax income. The Swiss universal bank and Asia-Pacific operations reported a double-digit increase in adjusted pretax income. The investment-banking and capital-markets division reported lower net revenue "in a quarter characterized by muted client activity," the bank said.

Write to Pietro Lombardi at [e-mail]

(END) Dow Jones Newswires

April 25, 2018 04:56 ET (08:56 GMT)

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