Credit Suisse reports 24% leap in Asian revenue
Credit Suisse reported solid earnings in its Asian markets today, as the first of the big European banks to report 1Q earnings also warned it will need to set aside half a billion dollars against potential losses.
Switzerland's second largest bank by assets said it was also setting aside $584m to cover potential loan losses as companies struggle as a result of the covid-19 lockdowns.
Much of the company's growth in Asia-Pacific stemmed from its private banking business, whch the company boosted with a further $25.7m of investment. The Asia market's pre-tax income was $234m, a rise of 24% higher than 1Q2019.
Our wealth management-focused business model proved to be resilient once more, while allowing us to leverage our investment banking capabilities for our clients in a period of high volatility."
Overall Credit Suisse reported pre-tax profits had risen by 38% YoY to reach CHF 252m. The international bank posted net revenues of CHF 5.8bn, rising 7% on the same period in 2019. Much of this rise can be attributed to the transfer of the InvestLab platform to Allfunds Group in October 2019.
The firm's return on tangible equity, often seen as a measure of adequate capital in banks, was up 8.6% YoY to 13.1%.
"Thanks to our strong capital and liquidity base, we are well positioned to support our clients, employees and societies in the coming quarters, during which we expect the covid-19-related uncertainty to persist," CEO Thomas Gottstein said.
Gottstein, who was formerly head of the bank's Swiss unit, was appointed CEO of Credit Suisse Group in February. He went on to say: "In my first quarter as CEO of the Group, we all witnessed a highly challenging environment with a severe impact from the covid-19 pandemic."
'Resilient performance'
He said the bank "delivered a resilient performance, driven by our wealth management and Asia-Pacific divisions, while absorbing a significant reserve build of over CHF 1 billion. Our wealth management-focused business model proved to be resilient once more, while allowing us to leverage our investment banking capabilities for our clients in a period of high volatility."
Gottstein also commented on the company's remote working policy, saying, "We remained supportive of our global workforce by enabling over 90% of our employees to work from home as well as granting paid family leave as long as schools remain closed, and stayed connected to our societies worldwide."
Gottstein's appointment came as his predecessor, Tidjane Thiam, resigned amid a power struggle following a spying scandal at the bank.
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