Despite a 57 percent year-on-year pretax income drop in its markets business, Credit Suisse was able to offset this with a 29 percent increase in its regional wealth management business.
The bank overall posted income before tax of 237 million Swiss francs ($239 million), up 9 percent year-on-year noting that strong performance from its «wealth management & connected» business offset the investment bank’s slowdown. Profit before tax was 216 million Swiss francs and 21 million francs for its wealth management & connected and markets business, respectively.
It attributed the significant profit drop to lower revenues from emerging market rates products due to weaker trading performance and decreased client activity but registered higher revenue from credit and structured products.
Slumping Markets Hit AUM
The bank registered net new money of 2.8 billion francs, primarily from Southeast Asian clients, but added that market movements caused its overall assets under management to drop 300 million francs to 218.7 billion Swiss francs. FX-related movements were the prime culprit of AUM drop, contributing a 3.9 billion Swiss franc decrease.
Globally, Switzerland’s second-largest bank posted a net income of 937 million francs, up 25 percent from the first quarter and 45 percent year-on-year. Despite investment banking struggles in Asia, its global markets business registered a pretax income of 357 million Swiss francs, up 141 percent year-on-year.
Growing Expectations
«Following the headwinds, we saw in Q1, the latter half of Q2 provided a more supportive revenue environment as a result of growing expectations around a Sino-U.S. trade agreement and dovish central bank statements improving investor sentiment and leading to higher activity levels among clients sequentially,» the bank stated.
