(RTTNews) – Swiss lender Credit Suisse reported weak third-quarter net income on Thursday, while pre-tax profit climbed on strong revenue growth. Looking ahead, the company said it expects a net loss in the fourth quarter and further reduction in market volumes for the remainder of 2021 as the business environment normalizes.
Separately, Credit Suisse announced its group strategy, with a clear focus on strengthening, simplifying and investing for growth. The company plans to reshape the investment bank by cutting more than $ 3 billion, or about 25%, of its capital by abandoning the majority of Prime Services from 2021 to 2022.
The release of the majority of Prime Services is also expected to reduce Equity Sales & Trading revenue.
In addition, the company would redeploy additional capital of around 3 billion Swiss francs in the Wealth Management division by 2024, an increase of 25%.
The firm said: âIn Wealth Management, we expect recurring commissions and fees to continue to benefit from higher levels of AuM as well as increased levels of mandate penetration. With respect to transaction-based income in Wealth Management and Investment Bank, we would expect income performance to reflect the normalization of trading conditions as well as the usual seasonal slowdown in market activity. “
For the third quarter, net profit attributable to shareholders fell 21% to 434 million Swiss francs from 546 million francs last year.
Profit before tax amounted to 1.01 billion francs, an increase of 26% compared to 803 million francs the previous year.
On an adjusted basis, excluding significant items and Archegos, pre-tax income stood at 1.36 billion francs, compared to 1.09 billion francs.
Net sales for the quarter increased 5% to 5.44 billion francs from 5.20 billion francs last year. Adjusted net sales increased by 6% compared to last year to reach CHF 5.50 billion.
Income from wealth management increased by 3% compared to last year to reach CHF 3.27 billion. The investment bank’s revenues were $ 2.47 billion, up 10% from the previous year.
The Group’s assets under management or assets under management amounted to more than 1.6 trillion francs at the end of the third quarter, up approximately 10% year-on-year. Wealth management outstandings of CHF 843 billion increased by around 9% year-on-year, supporting growth in fees and recurring charges of 14%.
In Switzerland, Credit Suisse shares were trading at CHF 9.95, up 0.53%. In pre-market activity on the NYSE, stocks gained around 0.7% to trade at $ 10.86.
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