FRANKFURT – Swiss bank Credit Suisse says its net profit fell 34 per cent in the first quarter, more than expected, as bond-market woes hurt earnings at its investment banking business.
Profit dropped to 859 million Swiss francs ($979 million) from 1.303 billion francs in the same quarter a year ago. The figure was short of analyst estimates of 1.1 billion francs as compiled by financial information provider FactSet.
Group core revenues fell 8 per cent to 6.469 billion francs ($7.375 billion).
The bank said Wednesday it saw lower revenues and earnings at its investment banking division, which faced “a challenging market environment.” The division saw less client activity in bond sales and trading and took a 297-million-franc loss on businesses it considers non-strategic and is planning to sell or wind down. It also cited difficulties in emerging markets.
Credit Suisse shares traded down 2 per cent at 27.26 francs in midmorning trading in Europe.
CEO Brady Dougan nevertheless called it a “strong performance,” citing increased asset inflows and more money under management from the wealthy. He said the bank made a 14 per cent return on equity in businesses it plans to keep, within reach of its longer-term target of 15 per cent.
The investment bank’s troubles were partly offset by the private banking and wealth management business, which Dougan said saw “a meaningful increase in the share of assets under management from ultra-high net worth clients.” Income before taxes there rose 15 per cent to 1.102 billion francs.