Credit Suisse Group AG (VTX:CSGN) was able to turn a profit for the fourth straight quarter, as the largest bank in Switzerland as measured by market value enjoyed a good start to their fiscal year, ending on December 31, 2009.
As with many of their global rivals, Credit Suisse enjoyed revenue from trading in 2009, as low interest rates aided them in the carry trade. Even so, the company had some of that cut back in the quarter because many investors stood on the sidelines and trading activity decreased significantly during that time period; an industry-wide experience for major banks around the world.
The last 12 months made a big difference for Credit Suisse as the same quarter last year they had losses of 6.02 billion francs, while this year they enjoyed profits of $746 million.
For the quarter, Credit Suisse garnered 6.4 billion francs in net new assets, probably gaining some of that from major Swiss competitor UBS AG, which had their high-end clients take out about 45.2 billion francs in assets. Credit Suisse said they have a goal of increasing 225 billion in net new assets by the end of December 2012.
A concern of Credit Suisse is the possibility of some countries offering tax amnesties in a similar fashion as the Italians did, which if it comes about, could result in a loss of up to 35 billion francs in the years ahead. This would of course have a strong, negative impact on the number of wealth management clients they have, as it’s high net worth individuals who would apply for the amnesties.
Pretax Profits for the quarter in their wealth management unit ended at 857 million francs, while asset management profits increased to 159 million francs in the quarter. Last year asset management lost 656 million francs during the same time period.
Trading revenue for the quarter plunged by 55 percent, generating 1.03 billion francs for the investment bank division. Analysts had been looking for 1.25 billion francs in profits from that segment of the bank.
Concernng hiring, the company said on Thursday it will be adding to the investment banking division on a selective basis for 2010. But as with other banks, that shouldn’t be considered a nod toward optimism for major trading growth, as 10 percent is the generally acknowledge figure for attrition in the banking industry, and unless hiring is above that percentage, banks are simply replenishing the loss of workers and not adding on in anticipation of growth.
Overall, there was general disappointment in the fourth-quarter earnings, even though the bank managed to remain profitable once again.
