After years of struggling for Credit Suisse, it appears that the Swiss bank is starting to get back on its feet, with the firm posting its highest quarterly earnings in four years for the second quarter of 2019 this Wednesday.
During the period, net income attributable to shareholders increased by 45 percent year-on-year to reach CHF 937 million ($945.8 million), up from CHF 647 million in the second quarter of 2018. This figure is also higher than the previous quarter, which recorded a net income of CHF 749 million, by 25 percent.
Following this solid result, Credit Suisse has confirmed that it plans to achieve a 10-11 percent return on tangible equity (RoTE), which is double the 5.5 percent the Swiss company reached in 2018. RoTE is a metric that measures profit as a percentage of shareholders’ equity after subtracting goodwill and other tangible assets.
Taking a look at how Credit Suisse did in its Global Markets business, the unit delivered a pre-tax income of $359 million in the second quarter. When measuring this against the same quarter of the previous year, it is significantly higher by 141 percent.
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Despite tougher market conditions, the Swiss bank saw positive operating leverage in the quarter, with net revenues increased by eight percent year-on-year. This was primarily driven by a strong performance in its credit franchise.
Fixed income revenues climb 11% YoY for Credit Suisse
Fixed income sales and trading revenues came in at $901 million in the second quarter. Against Q2 of 2018, revenues have increased by 11 percent. According to the report, higher revenues in global credit products and its securities products outperforming peers drove the uptick in revenues.
Revenues generated from equities sales and trading also rose by three percent from the second quarter of 2018, as a result of higher prime services and cash trading result.
Commenting on the results, Tidjane Thiam, the CEO of Credit Suisse, said: “In the second quarter, we continued to deliver a strong operating performance through the disciplined execution of our strategy, with higher profits, both year on year and sequentially.
“We achieved an RoTE of 10% for the first time since we launched our restructuring in 4Q15. We have been explicit that we wanted to be a leading wealth manager with strong investment banking capabilities, and we have continued to make progress on both of these fronts.”