Credit Suisse doubles Q2 profit as overhaul pays off

Despite global uncertainties, Credit Suisse struck a confident note on its ability to deliver gains in its flagship business om 2018. PHOTO: AFP

ZURICH (REUTERS) - Credit Suisse more than doubled its second-quarter net profit as gains from the final leg of a three-year overhaul managed to outshine weakness in the overall wealth management market.

Net income attributable to shareholders from April through June rose 114 per cent year on year to 647 million Swiss francs (S$891.3 million), Switzerland's second-biggest bank said on Tuesday (July 31), beating expectations as it further pared back costs and grew business banking the world's wealthy.

Despite global uncertainties which have been a drag on wealth managers as rich clients shy from potentially risky investments, Credit Suisse struck a confident note on its ability to deliver gains in its flagship business this year.

"Looking at the rest of the year, we believe that the growth potential of our Wealth Management-related businesses of Switzerland, Asia Pacific and International Wealth Management remains intact and we expect them to continue to benefit from broad-based, client-led growth in the second half of 2018 as we support our clients and allocate capital to our highest returning business opportunities," the bank said in a statement.

It said it was on track to meet targets for 2018, the final year of a three-year turnaround plan to focus on wealth management over investment banking and settle legal cases, as well as to achieve a return on tangible equity of 10-11 per cent for 2019.

Its shares were seen rising 2.9 per cent, according to pre-market indications.

Both UBS and Julius Baer, Credit Suisse's largest listed Swiss rivals, struck cautious notes over concerns that ongoing geopolitical tensions and escalating trade wars were hampering client activity.

Julius Baer saw net inflows dip during the first six months of 2018 due to clients deleveraging their portfolios, while UBS registered 1.2 billion francs in second-quarter net outflows.

At Credit Suisse, net new money inflows - a closely watched indicator of future earnings in wealth management - totaled 9.1 billion francs across its three wealth management businesses during the second quarter.

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