Credit Suisse announces changes amid earnings beat

Credit Suisse Group AG beat expectations in the second quarter and presented some strategic changes, including the creation of a global investment bank, while also vowing to achieve cost savings.

Net profit for the period rose 24% to 1.16 billion Swiss francs ($1.27 billion), it said Thursday.

Revenue rose 11% to CHF6.19 billion.

The results beat expectations of a net profit of CHF764 million on revenue of CHF5.61 billion, according to a consensus forecast provided by the bank.

In the second quarter, Switzerland’s second-largest bank by assets set aside CHF296 million in provisions against potential losses from borrowers. In the same period last year, provisions were just CHF25 million. Provisions are below expectations, as analysts had forecast provisions of CHF445 million.

The bank announced some strategic changes, including the creation of a global investment bank.

It targets cost savings of around CHF400 million per year starting from 2022. The bank expects adjusted operating expenses of CHF16 billion to CHF16.5 billion in 2020.

As for shareholders remuneration, Credit Suisse plans to pay in full the second part of the 2019 dividend and, in the medium term, wants to distribute at least 50% of net income to shareholders.

Pietro Lombardi

source:marketwatch.com