Credit Suisse second-quarter profit up on trading revenue

Credit Suisse’s net profit rose by a third in the second quarter from a year ago, broadly meeting forecasts, as strong trading in stocks and bonds bolstered its investment banking business.

The bank said on Thursday it generated net income of 1.045 billion Swiss francs (HK$8.7 billion) for the quarter, compared to 1.017 billion francs seen by analysts in a Reuters poll.

Mirroring a strong performance by Wall Street rivals, Credit Suisse more than doubled pre-tax profits at its investment banking division from a year ago when trading was badly hit by the euro-zone crisis. Compared to the previous quarter, typically the strongest period for capital markets activity, pre-tax profit was down 42 per cent.

Pre-tax profit at Credit Suisse’s private banking and wealth management division rose just 4 per cent on the quarter and fell 6 per cent year on the year

A spike in bond yields in the latter part of the second quarter, amid fears the US Federal Reserve would taper its quantitative easing efforts, led to higher market volatility and in turn hurt Credit Suisse client activity in June and into July. Despite that, the bank said it had seen recent signs of stabilisation in its major markets.

“In the longer term, the transition to higher rates will benefit our business, both our global Private Banking & Wealth Management franchise and our client-focused, capital-efficient investment banking business,” chief executive Brady Dougan said in a statement.