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Thiam hails Credit Suisse's return to annual profit

Reuters  |  ZURICH 

By Hughes Neghaiwi

ZURICH (Reuters) - posted its first annual profit in four years on Thursday as a long-running restructuring plan made its mark but Switzerland's second-biggest warned of significant uncertainty on how markets will fare in the months ahead.

Calling the fourth quarter a "stress test" for the revamped group, said results showed the was now on a sound footing to weather turbulent markets -- marked by concerns over a shutdown, U.S.-trade tensions and Britain's unclear exit from the -- after finishing a three-year turnaround.

"The old would have really struggled. And we've had our best fourth quarter since 2013. So that's the magnitude of the change that has taken place," he told CNBC.

But the bank's global markets division continues to be a drag. It posted a worse-than-expected pre-tax loss of 193 million francs in the fourth quarter, continuing a trajectory analysts view as disappointing.

Shares in gave up initial gains to trade 2.5 percent lower by 0910 GMT.

Overall the said it stood "absolutely behind" its 2019 profitability target for a return on tangible equity of 10-11 percent.

Reaching that goal will require the bank to nearly double its net profit from 2.06 billion Swiss francs in 2018 to 3.9 billion this year, which the bank says it should achieve thanks to self-help measures which do not rely on revenue growth.

Credit Suisse has spent the last three-and-a-half years working towards an image of stability as a bank for the world's ultra-wealthy, shrinking its and fashioning itself the 'bank for entrepreneurs'.

But wealth managers faced tough conditions in 2018 as well-off clients shied away from uncertain markets and sold riskier assets.

The impact on Swiss banks with big wealth management operations, including larger rival and smaller lenders and Vontobel, showed that for the world's rich does not bring immunity from geopolitical turmoil.

For the first time since Thiam's arrival, Credit Suisse in 2018 pulled in more fresh client money in private than did -- the world's largest -- a significant feat given UBS's much larger asset base, and managed to pull in funds while peers lost them late in the year.

The bank said widespread volatility which rocked markets late last year and led to sluggish trading had showed signs of normalisation in the first six weeks of 2019.

Assets under management recovered during the month of January and are now back to November levels, it said.

($1 = 1.0083 Swiss francs)

(Reporting by Hughes Neghaiwi; Editing by Michael Shields/Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 14 2019. 15:00 IST