Now Reading:

Credit Suisse write-offs hit profit, drag down shares


Credit Suisse write-offs hit profit, drag down shares


A change of direction for Credit Suisse has meant big write-offs and a share price slump on Thursday. At one stage the shares were down 13 percent and they finished the day 10.89 percent lower.

Chief executive Tidjane Thiam is focusing more on wealth management in emerging economies while slimming down the investment banking division.

As a result Credit Suisse wrote off 3.8 billion francs (3.4 billion euros) in the final quarter of last year meaning it posted a net loss in 2015 of 2.94 billion Swiss francs (2.6 billion euros).

It is also speeding up cost savings which include cutting around 4,000 jobs.

“We have a clear strategy, clearly we are implementing it in difficult markets and our outlook for the first quarter remains very cautious,” Thiam said in a call to analysts.

He added: “(We have) very unique market conditions and they are challenging, but fundamentally we are maintaining the objectives and the targets we have presented”.

But the market watchers were mostly not convinced. JP Morgan Cazenove analysts called Credit Suisse’s results “very messy”, pointing out an underlying loss before tax versus market expectations of a profit.

The bank’s common equity tier 1 capital ratio of 11.4 percent also lagged consensus even after a 6.0 billion franc capital raising last year, it noted.

The bank has also not dispelled scepticism about its ability to meet its growth targets. “Reaching the targets by 2018 seems more unrealistic than ever,” analysts at Zuercher Kantonalbank said.

Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.

Next Article